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A biweekly mortgage is a type of mortgage loan that allows the borrower to make payments more often than a standard mortgage. As the name suggests, with a biweekly mortgage, the borrower makes payments once every two weeks as opposed to the usual once per month.
This form of mortgage is mostly seen in the United States. It is popular because a biweekly mortgage aligns with the payday schedule of most employees in the US.
Many mortgage lenders require that borrowers commit to a strict biweekly payment schedule as a condition for the mortgage. The payment schedule cannot usually be changed. As such, the borrower will need to make sure that they will have the funds available and on hand during the month to pay off the mortgage.
Because biweekly mortgages typically have twice the payments as a standard mortgage, it can be easier and faster for some to pay off the mortgage. On the other hand, the increased number of payments can incur late fees and delinquency fines for some borrowers.
Since a biweekly mortgage is paid every two weeks, this means there are 26 half payments, or 13 full payments a year. This means that 13 full payments are made over a 12 month period, speeding up the mortgage repayment. As such it can save the borrower from additional interest costs and payments.
Borrowers should weigh out the pros and cons of biweekly mortgages in comparison to a standard mortgage and see what works best for them.