Though there are different thoughts about whether a person should pay off a mortgage early, often times the money-saving benefits to making bi-weekly mortgage payments outweighs the negatives.
Here are 3 reasons to pay 1/2 of your monthly mortgage payment every 2 weeks.
#1 You’ll Make an Extra Payment Each Year
If you’re looking to pay off your mortgage ahead of schedule, making bi-weekly payments means you’ll make an extra payment every year. Instead of making 12 monthly payments every year, you’ll make 26 bi-weekly payments, which are equivalent to 13 monthly payments.
By paying half of your mortgage payment every 2 weeks instead of paying the entire payment monthly, you could potentially shave years off of your repayment time and build equity in your home faster.
#2 Financial Flexibility
Since bi-weekly mortgage payments result in building up equity in your home more quickly than you would have otherwise, you could have more financial flexibility in the event of large unexpected expenses or a job loss.
Additionally, some people may find it easier to make smaller, more frequent payments on their home, which can be easier to manage. And merely from a scheduling perspective, paying your mortgage bi-weekly might be more convenient if you are paid bi-weekly by an employer.
#3 Reduce the Amount of Interest Paid
Paying off your mortgage faster by making bi-weekly payments reduces the amount of interest you pay on your mortgage. As a result, you could shave as much as 4 years off a 30-year mortgage. Not only can you pay your home off more quickly with bi-weekly payments, you can build equity in your home more quickly and save thousands of dollars over the course of the loan.