Biweekly mortgages are a great way to quickly pay down the outstanding principal on a loan; and they do so in a relatively painless way. But just how much money can you really save with a biweekly mortgage arrangement? Our biweekly mortgage calculator will show you exactly what you can expect in terms of real savings.
The variables used in our online calculator are defined in detail below, including how to interpret the results.
The total amount of money borrowed for this mortgage, also referred to as the principal of the loan.
This is the annual interest rate on the mortgage. This is not the APR, which takes into account other costs associated with the mortgage.
The term of the loan is the number of years over which the mortgage will be repaid. The most common mortgage terms are 15, 20, and 30 years. With a biweekly mortgage, the term of the loan will be reduced because of the additional payments you will make each year.
This is the monthly payment necessary to repay the loan over its lifetime, if you were to choose a conventional, or more "standard," mortgage.
With a biweekly mortgage you are making payments every two weeks. This means you are making 26 payments each year, which are more than 2 payments x 12 months. With this type of mortgage, your biweekly payment will be exactly half of your standard monthly payment. That means a biweekly mortgage accelerates the pay down on the loan's principal.
This is the term, or length, of the standard loan, stated in months.
One of the advantages of biweekly mortgage payments is the fact that making 26 payments a year will reduce the length of your loan. This portion of the calculator will tell you how long you need to make biweekly payments before the mortgage principal is paid back in full.
This is how many months you save off your mortgage by switching to biweekly payments.
This is the total amount paid to the bank or lending institution over the life of the mortgage. Once again, there are two values calculated, one for the standard loan and one for the biweekly mortgage payment.
This is the total value that a biweekly mortgage delivers in terms of total interest charges for this loan. By choosing this type of payback arrangement, you are accelerating payments, shortening the term of the mortgage, and thereby reducing the effective borrowing costs.
Biweekly Mortgage Calculator - Copyright © 2005 - 2015 Money-Zine.com (Last Reviewed on February 2, 2015)
Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.