What's the Difference Between a Biweekly Mortgage and a Bimonthly Morgtgage?

Both the biweekly mortgage and bi-monthly mortgage involve making smaller, more frequent mortgage payments. While they are similar, there is a big difference between the two programs. Here are a few things to consider about the differences between a biweekly and bimonthly mortgage.

When Payments Are Made

One of the biggest differences between the biweekly mortgage and bimonthly mortgage is when the payments are made. With a biweekly mortgage, half of your mortgage payment is going to be made every two weeks regardless of the date. With a bimonthly mortgage, they are going to take out half of your mortgage payment on the first of the month and the other half on the 15th.

Effect

These two programs are also very different when it comes to the effect that they have on your mortgage. With the bimonthly mortgage, you are essentially going to be taking about a month off of your 30 year mortgage term. This is the result of applying the first payment directly to the principal. It reduces the interest slightly.

With a biweekly mortgage, you are going to be reducing the term by a little over six years. This is because you are actually making 26 half payments which results in one extra full payment every year. 

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