Biweekly mortgage calculator
By Jude Wallis
Paying half the monthly mortgage every two weeks means 26 half payments a year, which is one extra monthly payment. On $250,000 at 6.5 percent the $1,580.17 monthly payment becomes $790.09, clearing the loan in 628 periods and saving $73,434.82 of interest.
Interest saved
$73,434.82
628 biweekly payments of $790.09.
- Monthly payment
- $1,580.17
- Biweekly payment
- $790.09
- Payments until payoff
- 628
- Interest saved
- $73,434.82
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On this page
The formula
is the standard monthly payment. There are 26 fortnights in a year, so paying half of each fortnight pays 13 monthly payments rather than 12.
The trick is 26, not 24
A year holds 12 months and 26 fortnights. Paying half of $1,580.17 every two weeks means $790.09 paid 26 times, which is 13 monthly payments a year instead of 12. The extra payment is the entire effect. There is no separate saving from paying sooner within the month; it is small next to the thirteenth payment.
This also explains why the schedule feels painless. Nobody experiences $790.09 a fortnight as one extra payment a year, but the amortisation schedule does, and it is the schedule that decides when the loan ends.
Where the interest saving comes from
Every extra dollar goes straight to principal, and principal that is gone stops charging interest for the rest of the term. On $250,000 at 6.5 percent the loan finishes after 628 fortnights, a little over 24 years rather than 30, and the interest saving is $73,434.82.
The saving grows with the rate and with the term left. The second example, $200,000 at 6 percent, finishes in 638 fortnights and saves $49,624.01. Lower rate, smaller balance, smaller prize.
Sending extra yourself does the same thing
The same result comes from making 12 payments a year and adding a twelfth of a payment to each. Nothing about the fortnightly rhythm is magic; the thirteenth payment is. How extra payments work covers the general version, and the mortgage payoff calculator prices any extra amount.
The practical caution is the servicer. A fortnightly payment held in a suspense account and applied monthly saves nothing, because principal was never reduced early. What matters is when the payment reaches principal, not when it leaves the account.
What this comparison holds fixed
Both schedules use the same loan, the same rate and the same starting payment, so the only difference is timing and the thirteenth payment. Read it next to how mortgages work and the amortisation idea that sits under both. This is educational material, not financial advice.
Worked examples
\$250,000 at 6.5 percent paid fortnightly
A $250,000 loan at 6.5 percent over 30 years is paid as half the monthly amount every two weeks. How long does it take and what is saved?
- The monthly payment is $1,580.17, so the fortnightly payment is $790.09.
- 26 fortnightly halves make 13 monthly payments a year rather than 12.
- The balance reaches zero after 628 fortnights, against 360 monthly payments.
- Interest paid falls by 73434.82 against the monthly schedule.
Paying $790.09 every two weeks clears the $250,000 loan in 628 periods and saves $73,434.82 of interest.
A smaller loan at a lower rate
$200,000 at 6 percent over 30 years, paid fortnightly. What changes?
- The monthly payment is $1,199.10, so the fortnightly payment is $599.55.
- The loan clears after 638 fortnights and saves 49624.01 of interest.
$599.55 every two weeks clears the $200,000 loan in 638 periods, saving $49,624.01. A lower rate leaves less interest to save.
Paying twice a month instead of every two weeks
Twice a month is 24 payments a year, which is exactly 12 monthly payments and saves nothing. Every two weeks is 26 payments, which is 13. The $73,434.82 saving lives entirely in that difference of two payments a year.
Common questions
Do I need a special biweekly program?
No. Adding a twelfth of a payment to each monthly payment produces the same extra payment a year.
Why 628 periods rather than a round number of years?
Because the schedule ends when the balance hits zero, which lands mid year. 628 fortnights is a little over 24 years.
Is this financial advice?
No. It is educational material comparing two payment schedules on the same loan.
Keep reading
This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.