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Werewolfdad t1_j6oizxe wrote

Yes but only because you make an additional payment per year, since there are 52 weeks in a year (52/4=13 payments instead of 12)


LurdMcTurdIII t1_j6ojszg wrote

It's not just an additional payment, it all goes toward principle. Your normal mortgage payment is predominantly interest, especially early on.


BaronCapdeville t1_j6oky95 wrote

It only goes toward principal if you call and confirm the process for applying payments to principal with your mortgage servicer.

Simply making an extra payment is not a guarantee of paying down principal. Loan verbiage and loan servicer practices vary greatly across the country.


LurdMcTurdIII t1_j6ol5yh wrote

You're right, I do have to specify.


BaronCapdeville t1_j6olzim wrote

Just pointing that out because my folks paid in for a decade and all of it went towards prepaying their payments, none of it counted any extra toward their principal.

No disrespect.


Werewolfdad t1_j6okpk8 wrote

Yeah, its not different than making an additional principal payment


BouncyEgg t1_j6oj7k7 wrote

It's no different than making 1 extra full month mortgage payment per year.

  • 52 weeks / yr
  • 26 biweeks / yr
  • 1/2 Mortgage payments * 26 = 13 months worth of Mortgage payments

sephiroth3650 t1_j6on566 wrote

If you pay once a month, you make 12 full payments. If you pay every two weeks, you make 13 full payments. This "extra" payment annually will help pay off the mortgage faster.


Mysunsai t1_j6ojdrj wrote

Closer to 5 years earlier at current interest rates, give or take.

There are 12 months in a year. But there are 52 weeks in a year. So if you pay every two weeks, you make 26 payments, which is the equivalent of 13 months worth of mortgage payments every year. That’s why you pay off early.


CookieAdventure t1_j6orxos wrote

With mortgage companies nowadays, it works only if they agree. You are far better off with saving up money then once or twice a year making an extra principal payment toward your balance. Once you do this, ask them to re-amortize your loan. Some companies will do this automatically, some don’t.


UnevenHeathen t1_j6onrrp wrote

Yes, if you target it 100% to principle. It's a damn fine move if you can do it without making other sacrifices.


elcheapodeluxe t1_j6ov78i wrote

Are you asking about specifically eactly every two weeks, or did you really mean "twice a month" or "every fifteen days which is about two weeks"?

If you just mean making half the payment twice as often - you are saving a little bit in interest. You know what would save you a little bit MORE in interest? Make your ENTIRE monthly payment half a month early. But in the grand scheme - that is not going to shave off ten years. Making an extra payment (especially EARLY in a 30-year mortgage) will have a bigger impact.


nolesrule t1_j6p36fu wrote

Timing of payments doesn't make a difference with U.S. mortgages because interest is calculated based on the final monthly balance.


Oriumpor t1_j6p0xbx wrote

if it's actually 2 weeks you're paying 26 times a year. If it's the 15th and the 1st then it's 24.

One is more every year.


AzLibDem t1_j6otm9e wrote

Yes, if you are doing the "bi-saver" plan which applies directly to the principle.

It can cut 7-8 years off a 30 year mortgage.