A Bi-Weekly Accelerated Mortgage Payment plan is a simple calendar-arbitrage strategy that shaves 4 to 6 years off a 30-year mortgage and saves tens of thousands of dollars in lifetime interest without requiring a refinance.
How the Calendar Math Works: - A standard monthly mortgage requires 12 full payments per year. - Because a calendar year has 52 weeks, paying half (50%) of your monthly payment every 2 weeks (bi-weekly) results in 26 half-payments per year — which equals 13 full monthly payments per year. - That 13th extra full payment every year goes 100% toward reducing your unpaid principal balance, which immediately lowers the principal base on which future interest compounds.