Why Your Mortgage Lender Doesn't Want You to Make Biweekly Payments

What if you could pay off your mortgage 4-5 years early and save tens of thousands in interest—without increasing your monthly budget? The biweekly payment strategy does exactly that. Here's why your lender hopes you never discover it.

The Math That Banks Don't Advertise

Most people pay their mortgage once a month: 12 payments per year. But if you switch to biweekly payments (every two weeks), you make 26 half-payments per year. That's equivalent to 13 monthly payments instead of 12.

Example: $300,000 Mortgage at 6.5%

Monthly Payments

30 years

$383,139 interest

Biweekly Payments

25.5 years

$320,247 interest

You save $62,892 and 4.5 years

Why It Works

Two things happen when you switch to biweekly:

You make one extra payment per year

26 biweekly payments ÷ 2 = 13 monthly payments. That 13th payment goes entirely to principal, accelerating your payoff.

Interest has less time to accumulate

Paying every two weeks instead of monthly means your principal gets reduced more frequently, so less interest accrues between payments.

Calculate your savings

See exactly how much biweekly payments would save on your mortgage.

Why Banks Don't Promote This

Simple: they make less money. That $62,892 in interest you save? It comes straight out of their profit. They're not going to advertise a strategy that shrinks their revenue.

Some lenders even charge fees for "biweekly payment programs." Don't fall for it—you can do this yourself for free.

How to Set It Up (The Free Way)

You don't need a special program. Here are three ways to get the same benefit:

Option 1: Pay half every two weeks

Set up automatic transfers from your checking account to your mortgage every payday. Confirm with your lender they accept mid-month payments without fees.

Option 2: Add 1/12 to each monthly payment

Take your monthly payment, divide by 12, and add that to each payment. Same effect, simpler setup. A $1,896 payment becomes $2,054.

Option 3: Make one extra payment per year

Use your tax refund, bonus, or save up throughout the year. Specify it should go to principal only.

Important:

Always specify that extra payments go to principal only. Otherwise, your lender might apply them to future payments (which doesn't reduce your interest).

When NOT to Do This

Extra mortgage payments aren't always the best use of your money:

High-interest debt: Pay off credit cards (18-24%) before your mortgage (6-7%)
No emergency fund: Build 3-6 months of expenses first
No retirement savings: Max your 401(k) match before extra mortgage payments
Low mortgage rate: If your rate is under 4%, investing might return more

The Bottom Line

Biweekly payments are one of the simplest ways to build wealth. You barely feel the difference month-to-month, but the long-term impact is massive.

The bank won't tell you about this because it costs them money. Now you know—the question is whether you'll act on it.