Biweekly Mortgage Plans: What it could mean for you!

ChatGPT_Image_Dec_14__2025__11_45_44_PM.png

Biweekly Mortgage Plans: What They Promise… and What You Really Need to Know

If you’ve ever opened an email promising to save you thousands on your 30-year mortgage—without refinancing, points, or paperwork—you’re not alone. These biweekly mortgage ads show up everywhere, and while the claims sound exciting, there’s always more to the story.

Most of these offers don’t come from actual mortgage lenders. They come from third-party companies that package the concept with lots of flashy selling points:

  • No closing costs!
  • No refinancing!
  • No points!
  • No credit check!
  • No appraisal!
  • Save thousands!
  • Cut years off your mortgage!

And technically, they’re not lying. They’re simply charging you for something you can easily do yourself—for free.

How Biweekly Payments Actually Work

A standard mortgage requires 12 payments per year. A biweekly plan takes half of your monthly payment every two weeks—26 half-payments annually. That’s the equivalent of 13 full payments each year instead of 12.

That “extra” annual payment goes toward your principal, which helps your loan amortize faster. Less interest paid over time = real savings.

So yes, the math is accurate.

But here’s the catch: you can’t just mail in half-payments every two weeks. Lenders generally don’t accept partial payments.

That’s where biweekly payment companies step in. They:

  1. Withdraw half your payment every two weeks from your bank account
  2. Hold your money in a trust account
  3. Send your full payment to your lender once a month
  4. Accumulate enough extra money over the year to make one additional payment toward principal

The Trust Account Risk

Your money sits in the company’s trust account until your regular payment is due. And so does everyone else’s. Most of the time, nothing goes wrong.

BUT. if there’s:

  • Mismanagement
  • Accounting errors
  • Fraud

…your mortgage payment may not get made on time.

If your lender doesn’t receive your payment, you are still responsible—even if the biweekly company already withdrew the money from your bank account. That can mean late fees, stress, and the hassle of chasing down your funds later.

What Biweekly Programs Cost

These companies often charge:

  • A set-up fee ($195–$350 is typical)
  • Recurring transaction fees for each automatic withdrawal
  • Maintenance fees
  • And meanwhile, they earn interest on the funds they hold in your trust account

Those fees chip away at the savings the plan advertises.

How Much You Really Save

As an example:
A $100,000 loan at 8% interest

A biweekly plan might result in:

  • Your first extra principal payment after about a year
  • $43,852 in interest savings over the life of the loan
  • A payoff date nearly seven years earlier

But when you subtract set-up, transaction, and maintenance fees, your true savings decrease.

The No-Cost DIY Version

You can achieve the exact same payoff benefit—and often more—without paying a middleman.

Here’s how:

  1. Take your monthly payment.
  2. Divide it by 12.
  3. Add that amount to your monthly payment.
  4. Mark it clearly as “Principal Reduction.”

That’s it.

Using the same loan example, you’d save:

  • $45,904 (more than the biweekly program)
  • Pay off the loan three months sooner

Because you’re applying extra principal every single month—not once a year.

And best of all? It’s free.

“But I Need the Discipline…”

Biweekly companies often claim homeowners lack the discipline to make extra principal payments themselves.

But today, online banking makes automatic payments effortless. You can set up:

  • Your regular mortgage payment
  • Your extra principal payment
  • Automatic monthly transfers

No middleman. No fees. No risk of someone else holding your money.

Biweekly mortgage plans don’t do anything magical. They simply collect your money, hold it, then make your normal monthly payment—and charge you for the privilege.

If your goal is to reduce principal faster and save money, the strategy behind biweekly payments does work.

But, if you do it yourself, you’ll:

  • Avoid fees
  • Avoid trust-account risks
  • Save even more
  • Pay off your mortgage even faster

The biweekly mortgage plan—who needs it?

If you’re committed to paying down your mortgage early, doing it on your own is not just a good plan… it’s the best plan.

Need more information and more expert adivce (as I am NOT a licensed mortgage lender/broker), let’s talk! I’m happy to share the contact information for my top mortgage lenders/brokers.

Skip to content