Making biweekly mortgage payments can save you roughly 4 to 8 years on a 30-year mortgage by effectively making one extra monthly payment each year, paying down principal faster and reducing total interest paid. This strategy pays half your monthly bill every two weeks, resulting in 26 half-payments (or 13 full payments) annually instead of 12.
By paying 1/2 your monthly payment every two weeks, each year your mortgage company will receive the equivalent of 13 monthly payments instead of 12. This simple technique can shave years off your mortgage and save you thousands of dollars in interest. Bi-weekly payments save $136,698.91 in interest!
Here are some ways you can pay off your mortgage faster:
Yes! You can pay off your mortgage early
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.
Dave Ramsey strongly advocates for 15-year, fixed-rate mortgages as the quickest path to wealth, emphasizing lower total interest, faster equity building, and less debt, asserting that if you can't afford the higher payments, you can't afford the house; he recommends buying with cash if possible, but a 15-year loan is the preferred borrowing option, keeping your payment under 25% of your take-home pay.
If you pay $100 extra each month towards principal, you can cut your loan term by more than 4.5 years and reduce the interest paid by more than $26,500. If you pay $200 extra a month towards principal, you can cut your loan term by more than 8 years and reduce the interest paid by more than $44,000.
The main cons of paying off a mortgage early include losing the mortgage interest tax deduction, facing opportunity costs (missing higher investment returns), and reducing your financial liquidity (tying up cash in your home instead of having it accessible). You might also incur prepayment penalties (though rare on conventional loans), and it can slightly lower your credit score by removing a large, established debt, according to U.S. Bank.
Despite the benefits, biweekly payments may have some drawbacks. Some mortgage lenders charge prepayment penalties or fees, which can diminish the financial benefit of paying extra toward your principal. Other lenders simply may not offer a biweekly payment option, which would require you to manually make payments.
There are some easy steps to follow to make your mortgage disappear in five years or so.
Paying a 30-year mortgage bi-weekly (half payments every two weeks) effectively makes one extra full payment per year, which can shorten your loan term by about 6 to 8 years, paying it off in roughly 22 to 24 years, and saving thousands in interest by applying extra money to the principal sooner.
Overpaying your mortgage can have big benefits, including clearing your repayments sooner and paying less interest.
Three points on a mortgage cost 3% of your total loan amount, acting as prepaid interest to lower your interest rate; so on a $200,000 loan, 3 points would cost $6,000, potentially reducing your rate by about 0.75% and saving you money over the life of the loan if you stay in the home long enough to break even.
The average age to pay off a mortgage in the U.S. is around 62, with many becoming mortgage-free in their early 60s, coinciding with or just after typical retirement age, though figures vary by source. While some financial experts suggest paying it off by 45 for aggressive investing, data shows a significant portion of homeowners, especially older ones (60+), are mortgage-free, but increasingly, older adults (60s, 70s, 80s) carry more mortgage debt than previous generations, according to Marketplace.
Make extra house payments.
And that means if you make just one extra payment annually, you'll knock years off the term of your mortgage—plus save thousands of dollars in interest.
It's a trade-off: paying off a small mortgage offers security, frees up cash flow, and saves interest, especially with high rates, but keeping it allows you to invest extra money (potentially earning more), keep liquidity, and possibly benefit from the mortgage interest tax deduction. The best choice depends on your interest rate (high rate favors paying off), risk tolerance (security vs. investment growth), and need for liquid cash.