When it comes to paying off your mortgage, small changes can lead to big savings. One of the simplest strategies to shave years off your loan and save thousands in interest is switching to bi-weekly payments. At Avalon Mortgage Group, we help homeowners make smart financial decisions, and this is one of our favorite tips!
What Are Bi-Weekly Payments?
Instead of making one monthly payment, a bi-weekly plan means you make half your mortgage payment every two weeks. Since there are 52 weeks in a year, this results in 26 half-payments, or the equivalent of 13 full payments per year instead of 12. That extra payment may not seem like much, but over time, it can make a huge difference!
How Bi-Weekly Payments Save You Money
Let’s break it down with an example:
- Loan Amount: $300,000
- Interest Rate: 6.5%
- Loan Term: 30 years
- Monthly Payment: $1,896
- Total Interest Paid (30 years, monthly payments): $382,634
Now, let’s see what happens with bi-weekly payments:
- Bi-Weekly Payment: $948 (half of $1,896)
- Total Payments Per Year: 26 half-payments (13 full payments)
- Loan Payoff Time: 25 years & 9 months (instead of 30 years)
- Total Interest Paid: $317,000
- Total Savings: $65,634 in interest & paid off over 4 years early!
Other Benefits of Bi-Weekly Payments
✅ Build Equity Faster: Since you’re making more payments each year, you reduce your loan balance quicker.
✅ Lower Interest Over Time: Extra payments mean less interest accrues over the life of the loan.
✅ Improved Financial Discipline: Sticking to bi-weekly payments helps you budget better and stay on track to becoming mortgage-free.
✅ No Large Lump Sum Required: Unlike making one extra payment a year manually, bi-weekly payments make it easy and automatic.
Is Bi-Weekly Right for You?
Bi-weekly payments work best if: ✔️ You can comfortably afford the slightly higher annual payment amount.
✔️ You want to pay off your mortgage faster and save on interest.
✔️ Your lender doesn’t charge extra fees for setting up bi-weekly payments.
At Avalon Mortgage Group, we love helping homeowners find ways to save money and build wealth. If you’re interested in learning more about how bi-weekly payments could work for your mortgage, let’s chat! Contact us today to see if this strategy is a good fit for you.
📞 Call us at 404-850-2030
📧 Email us at [email protected]
🌐 Visit us at Avalonmortgagegroup.com
Make your mortgage work for you—one smart payment at a time!
By: Maya Atkinson (Avalon Mortgage Group)