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Biweekly vs Monthly on a $400,000 Mortgage
What changes if you pay a $400,000 mortgage every two weeks instead of monthly? This page compares the two plans at 6.1 percent over 30 years.
Paying $1,211.99 every 14 days ends the loan in 24 years 6 months. The monthly plan takes 30 years.
How the two plans differ
Take the usual monthly payment of $2,423.98 and cut it in half to get $1,211.99. Pay that amount 26 times a year. Because 26 halves make 13 full payments the loan shrinks faster than on a monthly plan.
Worked example
A $400,000 loan on the monthly plan costs $472,632 in interest. On the biweekly plan it costs $369,899.
Over 24 years 6 months the biweekly plan on $400,000 makes one extra monthly payment of $2,423.98 every year.
Questions about this calculator
Where does the extra $2,423.98 a year on a $400,000 loan go?
It goes straight to principal. Twenty-six half payments equal 13 monthly payments, so one extra payment of $2,423.98 is made each year on this $400,000 loan.
Do lenders offer biweekly plans on $400,000 loans?
Some do and some charge a fee. Others only take monthly payments. Ask your lender first. Compare the saving of $102,734 here with any fee.
Could adding $202.00 to each monthly payment on $400,000 match the biweekly plan?
It saves $101,681 of interest and ends the loan 5 years 6 months sooner. The biweekly plan saves $102,734. Both send about one extra monthly payment a year to principal.
Does the biweekly result on $400,000 assume interest builds every two weeks?
It does. The balance earns a fraction of the 6.1 percent yearly rate each period. Some lenders only apply a biweekly payment once a month, which would reduce the saving of $102,734.
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This page is for education only and is not financial or tax advice.