Three ways to pay the same loan
The loan doesn't change: the same amount, rate and term. Only how often you pay does, and that's enough to change when it's paid off.
- Monthly: 12 payments a year, the standard schedule every mortgage starts with.
- Twice a month (semi-monthly): 24 payments a year, often on the 1st and the 15th, each about half the monthly payment. That's 12 monthly payments' worth a year, so the loan takes as long.
- Every two weeks (biweekly): 26 payments a year of exactly half the monthly payment. That's 13 monthly payments' worth: one extra payment a year, all of it going to principal.
The calculator builds all three schedules from the loan you enter. The table shows each payment, how long the loan runs, the total interest and what each way saves against monthly. Below it, the chart and the year-by-year table put monthly next to twice a month or every two weeks, whichever you choose, with the balance at the end of each year and the interest saved so far. A button switches the whole calculator, payment-by-payment schedule included, to the other way of paying, and back.
An example
A $320,000 loan at 6.5% for 30 years:
| Paying | Payment | Paid off in | Total interest | Saved vs monthly |
|---|---|---|---|---|
| Monthly | $2,022.62 | 30 years | $408,141 | — |
| Twice a month | $1,010.87 | 30 years | $407,818 | $323 |
| Every two weeks | $1,011.31 | 24 years 2 months | $314,145 | $93,996 |
Twice a month barely moves: each half-payment reaches the balance a couple of weeks sooner, which saves a few hundred dollars over 30 years. Every two weeks saves almost $94,000 and finishes 5 years 10 months early.
How the gap grows, year by year
The extra payment each year looks small at first. On the same loan, after one year the biweekly balance is about $2,100 lower than the monthly one, and it has saved $70 in interest. But every dollar of principal paid early stops charging interest for the rest of the loan, so the difference compounds:
- after 5 years: $287,588 owed paying biweekly, against $299,555 monthly, and $1,854 of interest saved;
- after 10 years: $242,746 against $271,283, and $8,311 saved;
- after 20 years: $94,883 against $178,128, and $42,792 saved.
Most of the saving comes in the last years, when the biweekly loan is already paid off and the monthly one still has more than five years of payments to go. Twice a month, by contrast, ends year 10 within about $60 of the monthly balance.
More examples
At different rates
On the same $320,000 over 30 years, the higher the rate, the more paying biweekly saves, because there's more interest for the extra principal to cut:
- 5.5%: $1,816.92 a month or $908.46 every two weeks; biweekly finishes in 24 years 11 months and saves about $66,400.
- 6.5%: $2,022.62 or $1,011.31; 24 years 2 months, about $94,000 saved.
- 7.5%: $2,237.49 or $1,118.74; 23 years 4 months, about $128,300 saved.
A 15-year loan
$320,000 at 6.5% over 15 years is $2,787.54 a month, or $1,393.77 every two weeks. Biweekly finishes in 13 years 2 months and saves about $25,500. A shorter loan has much less interest in it, so there's less to save.
A larger loan
$500,000 at 7% over 30 years is $3,326.51 a month, or $1,663.26 every two weeks. Biweekly finishes in 23 years 9 months and saves about $172,300; twice a month saves about $500.
Which should you choose?
- Every two weeks if you want the loan gone sooner and are paid every two weeks yourself: the half-payment lines up with each paycheck, and the thirteenth payment happens without a noticeable budget change. Check first that your servicer applies each half-payment when it arrives, and doesn't charge a fee for the plan.
- Twice a month if you're paid on the 1st and 15th and want each payment to match a paycheck. It's about budgeting, not saving: expect a few hundred dollars over the loan, not years off it.
- Monthly if you'd rather keep things simple. You can get nearly the biweekly result by adding a twelfth of a payment to each monthly one: $168.55 more on the example loan pays it off in 24 years 2 months and saves about $93,100. Try it on the extra payment calculator.
What the calculator assumes
- Each payment is applied the day it's made, and interest is charged for the period: the yearly rate divided by 12, 24 or 26.
- Biweekly is exactly 26 payments a year. A real calendar occasionally has 27 two-week dates in a year; your servicer's dates decide how interest is actually charged.
- The comparison leaves out extra payments, so only how often you pay differs. Add extras in the calculator itself to see them on your chosen schedule.
- Biweekly is for fixed-rate loans; twice a month works with any loan type. USDA loans are paid monthly.
Common questions
Is biweekly better than monthly?
It pays the loan off sooner and saves interest, because 26 half-payments a year add up to one more monthly payment than paying monthly. It costs the same as paying that extra payment another way.
Why doesn't paying twice a month save much?
24 half-payments a year are exactly 12 monthly payments, so no extra principal is paid. The only saving is the two weeks each half-payment spends on the balance early.
Can I switch my existing loan to biweekly?
Many servicers offer it, some for a fee. Ask how they apply the half-payments. Paying a twelfth extra each month gets nearly the same result with no plan at all. To see what a switch now would do, use the mortgage balance calculator for what you owe today.