Biweekly Mortgage Payment Calculator

You can do a lot with a little when you make biweekly mortgage payments, saving you thousands of dollars in interest that would otherwise be paid over the life of your loan. Biweekly mortgage payments accelerate the life on the loan by allowing you to pay half of your monthly payment every two weeks (biweekly). This subtle extra payment plan means that your lender will have received the equivalent 13 monthly payments by the end of each year. Hero Loan is here to break down how a biweekly mortgage payment calculator translates these extra payments into money in the bank.

How Does a Biweekly Mortgage Calculator Work? 

There are three variables a biweekly mortgage payment calculator calculates to determine your bimonthly payment schedule: the principal balance on your loan, your annual interest rate, and the loan term. Although it isn’t necessary to put down a downpayment with a VA loan when purchasing a house, you may still want to consider this option. Once calculated, your biweekly mortgage payment calculator will show you an estimated comparison of what your monthly payments look like next to what your biweekly payments would look like. You can use this comparison to see how much money you can save over the life of the loan that would otherwise be spent on interest. To get a more accurate estimate, be sure to provide the correct information for the inputs below to calculate your biweekly mortgage payment schedule:

  • Principal balance. Put simply, this is the cost of your home at purchase. It does not include other costs, like interest and additional homeownership-related fees. 
  • Interest rate. Your lender charges you a fee for lending you the money to purchase your home in the form of interest. Before you even begin to touch the principal on your loan with your monthly payments, the majority of your initial monthly contributions will go towards paying off the interest on your loan. Because interest is calculated at compounding rates, it can grow exponentially over the life of a loan that goes to full term. For those who are in the financial position to do so, it’s better to bite the bullet and make more aggressive monthly payments in the form of biweekly payments to save yourself thousands of dollars that would otherwise be spent over the life of the loan.
  • Down payment. One of the perks for eligible military service members when purchasing a house with a VA loan is that a down payment isn’t necessary. That’s because, unlike conventional loans, a portion of your loan is guaranteed by the Department of Veteran Affairs. This federal backing means that your lender will be able to issue your loan without assuming the same level of risk that comes with a conventional loan. However, putting down a larger down payment will result in lower monthly payments since more of the principal will have been paid off. If your goal is to pay off your loan more quickly, putting down a downpayment will help you reach your goal sooner.
  • Loan term. You will most commonly see loan terms issued in increments of15 or 30 years. If you choose to follow a biweekly payment plan, you will shorten the life of your loan. This loan term acceleration will have a direct impact on the amortization schedule of your loan (the rate at which the ratio of interest to principal gets paid off on a loan). The big idea is that by accelerating your amortization schedule with a biweekly payment plan, (and effectively shortening your loan term) you will be able to save yourself thousands in interest. 

What Should I be Aware of When Switching to a Biweekly Mortgage Payment Plan? 

A biweekly payment plan is a more aggressive way to pay off the interest on your mortgage, which sets you up to shorten the life of your loan by giving you faster access to paying off the principal on your loan resulting in significant savings. That being said, you will want to ensure that a break-even point makes sense with this financial repayment plan. Although this is one of the relatively less painful methods for paying off your mortgage more quickly, you’ll also want to make sure you are financially positioned to accommodate the extra payments. Be aware that some lenders charge a fee for homeowners switching to a biweekly payment plan. An alternative option to the biweekly plan is to add 1/12th of your yearly mortgage to each monthly payment which will effectively produce the same long-term savings results. 

Lastly, if you are interested in lowering your interest rate and have access to a lump sum amount at the time of purchase, a similar option is to invest in discount points. Discount points are a one-time opportunity available when you first purchase your home. Each discount point is the equivalent of 1% of your mortgage. So, for a $300,000 house, one discount point costs $3,000. For each discount point, your interest rate lowers by a quarter (.25%). This means if your initial interest rate was set at 4.5%, with one discount point, it would lower to 4.25%. Ask your lender about other savings options available to you when buying your home. 

How Do Extra Payments Affect Your Amortization Schedule?

Your amortization schedule will show you the amount of principal and the amount of interest that comprise your monthly payments per your loan term. As your amortization schedule will show you, making extra payments with a biweekly plan means that you will save money by shortening the amount of interest paid over a shorter loan term. With the bulk of your initial monthly payments applied to the interest on your loan, that means it takes longer before even getting to the core of your mortgage: the principal balance (which is the actual cost of your home). By paying off the interest balance sooner, you are able to tackle the principal amount more quickly, putting you on an expedited pathway to homeownership. 

Additionally, you’ll want to talk to your lender to find out if directing your extra payments towards the principal is an option available to you. By focusing on lowering the principal, the compounding interest rate has less to feed off of, which will ultimately put you in a better position financially. You will also want to check if there are any fees applied for shortening the amortization schedule. Ultimately, you’ll want to be able to determine your break-even point to make sure that making biweekly payments is worth it. 

How Can The Hero Loan Help?

Hero Loan was intentionally created to provide our veterans and active-duty service members with specialized lending services familiarized with the VA loan program. Our team of friendly lending experts is well-equipped to support and guide you throughout the home buying process with a mission to get you the best deal possible on your loan. We value a personalized customer service experience, meeting face-to-face to ensure that our clients’ needs are met and heard. 

Our veterans are our heroes. In recognition of that, we are proud to give back by supporting local vet-owned businesses and events. We are also proud sponsors of the Fisher House Foundation, a community project that builds homes for military and veteran families to stay free of charge while a loved one is in the hospital. We come from humble beginnings and our team comes from the same communities we serve. That’s why we believe in taking care of its members, especially our invaluable military service members. 

Our outstanding team of caring professionals will not only provide you with top-notch customer service, but we will also close on your loan quickly with less stress when it comes to filling out the paperwork. We are able to do this through our streamlined service process, which allows for the underwriting process to be completed in-house. With closing times in as little as two weeks, we are here to help you get into your dream home without delay.

Our veterans deserve an expert lending service they can trust. So give us a call at (866) 222-0219 to speak with a VA loan representative who will be glad to talk about what you’ve found using a biweekly mortgage payment calculator. You can also reach out to us online through our live chat option today!