Biweekly Mortgage Calculator With Amortization Schedule

Biweekly mortgage calculator with amortization schedule is a home loan calculator to calculate biweekly payments for your mortgage. The biweekly loan calculator has a biweekly amortization schedule excel that breaks down all the payment details.

Amortization Schedule With Biweekly Payments

Amortization schedule with biweekly payments shows a borrower how much faster they can pay off their mortgages or loans compared to the regular monthly payments. The biweekly amortization schedule also shows how much money a borrower will save than the monthly payments.

How does biweekly pay work?

A biweekly payment is a payment option where the borrower pays back the lender every two weeks. The biweekly payment amount is half of a monthly payment. Since there are 52 weeks in a year, that means the borrower would make 26 payments each year, which is the equivalent of 13 payments of monthly payments. Essentially, borrowers who make biweekly payments make one extra payment than the popular monthly payments.

Pros and cons of biweekly mortgage payments

There are benefits and disadvantages of making biweekly mortgage payments towards a home mortgage depending on the borrower's situation. Following are the pros and cons of biweekly mortgage payments.

Pros of biweekly mortgage payments

1. Save on interest payment The main advantage of biweekly payment is that it saves the borrower interest. One extra payment might not seem like a lot, but it could save a borrower thousands depending on the size of the loan, interest rate, and the terms. Let's take a look at the interest payment differences between monthly and biweekly payments of a home mortgage of $200,000 with a 5.45% interest rate and a 30-year term. The total interest payment is $206,552.25 after 30 years of the monthly payments, whereas the total interest payment is $165,807.86 for borrowers who make biweekly payments. This is a saving of $40,744.40.

2. Early payoff With the increase in payments, borrowers will be able to pay off their loans earlier and faster. A 30-year mortgage could be a payoff in 25 years. Let's calculate how many years earlier can a borrower pay off their mortgages with biweekly payments on a loan of $200,000 with a 5.45% interest rate and a 30-year term. The payoff term is 30 years for monthly payments, and 25 years for biweekly payments. That means borrowers who make biweekly payments will be mortgage-free 5 years earlier than those who make monthly payments.
3. Build equity faster With more payments toward principal, homeowners build equity faster in their home mortgage. There are many benefits of building equity faster in their home. For one, borrowers will be able to get rid of private mortgage insurance if their down payment is less than 20%. More equity in the house gives homeowners the option to borrow more against their house with a lower interest rate than any other type of loan.

Cons of biweekly mortgage payments

1. Pay more each year Biweekly payments require borrowers to make one extra payment per year than monthly payments. Borrowers need to save more money and may need to make spending adjustments for their lifestyle. 2. It's fixed Once borrowers choose biweekly payment, they are locked into this payment option for the life of the term meaning they cannot switch back to monthly payments. If something happens in the future and the borrowers are no longer able to make this extra payment, they could get into trouble. 3. Can't afford to pay off other debt Borrowers should only consider biweekly payments if they have no other debt. If they have other debts such as credit card debt which has a much higher APR than mortgage payments, they will actually lose money with biweekly payments. They save some interest money with biweekly payments and then pay much higher interest for credit card debts. 4. No capital for other opportunities Paying more on their home mortgage means the homeowners might lose opportunities for other ventures. They could miss out on investments that offer higher returns than savings on interest payments. They may need the extra money to start a business.

Biweekly Payment Vs. Extra Payment

Extra payment is an alternative to biweekly payment, and it offers more flexibility than a biweekly payment. Borrowers can choose to make extra payments toward principal whenever they like instead of locking into the biweekly option. They can make one extra payment per year, and a few more payments when times are good. Borrowers can skip the extra payment altogether when the economy gets tough. They can also increase their monthly payment and have the extra go to reducing the principal.

How to make biweekly mortgage payments?

To make biweekly mortgage payments, borrowers need to first set up with their lenders. Some lenders charge service fees and prepayment penalties. In that case, the biweekly payment might not be worth all the effort as the fees might cut all or most of the savings from the biweekly payments. Borrowers should check with their lenders to see if there are setup fees for biweekly payments or penalties for paying off their loans early. They might negotiate with the lender to get the fees waived.

How to use the biweekly mortgage calculator?

The biweekly mortgage calculator will calculate everything that a borrower needs to see. Here are some of the features of the calculator. Biweekly amortization schedule - Show the biweekly payments, the interest payments, and the principal payment for each period. Borrowers will see how much they are paying and when their mortgages will be paid off. Borrowers have the option to view the biweekly amortization schedule by each period or group them by year. Biweekly & extra payment - For borrowers who want to accelerate their mortgage payments, our calculator has the option to add extra payments on top of a biweekly plan. Borrowers can make one extra payment or set up recurring extra payments toward their mortgages and see how that will help them pay off their mortgages. Biweekly vs. monthly payment - The biweekly mortgage calculator will also show a table that compares monthly and biweekly payments. This table shows the interest costs and how much in total the borrower will pay with each plan. Borrowers will see exactly how much they can save with biweekly mortgage payments and how many years earlier can they pay off their mortgages. Last but not least, borrowers can still choose to calculate their mortgage payments by monthly with the monthly payment option.