What this calculator does
Paying half your monthly mortgage payment every two weeks sounds like the same thing as paying monthly. It is not, because there are 26 fortnights in a year but only 12 months, so you make the equivalent of 13 monthly payments instead of 12.
That extra payment goes entirely to principal, and the effect compounds. On a $400,000 loan at 6 per cent over 30 years it cuts the term to 24.6 years and saves $98,220.48 in interest.
The formula
The biweekly payment is half the standard monthly payment. Over a year, 26 of those equal 13 monthly payments, so the schedule is modelled as the monthly payment plus a thirteenth added each month, run until the balance clears.
| Term | Meaning |
|---|---|
| Biweekly payment | Half the monthly payment, made every fortnight. |
| The thirteenth payment | The extra annual payment that 26 fortnights produce, which drives the whole effect. |
| Interest saved | The difference between total interest on the standard schedule and the accelerated one. |
The inputs explained
| Field | What to enter |
|---|---|
| Loan amount ($) | The loan amount. |
| Annual interest rate (%) | The annual interest rate. |
| Loan term (years) | The standard loan term in years, used as the comparison baseline. |
When to use it
Paying a mortgage off sooner without a big change
The extra cost is one additional monthly payment a year, spread across 26 smaller ones.
Matching payments to fortnightly pay
Where income arrives fortnightly, the schedule lines up naturally with cash flow.
Comparing against a lump sum payment
The saving comes from the extra annual payment, so a voluntary extra payment achieves the same thing.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How much does the rate change the saving?
The same loan at three interest rates.
| Interest rate | Biweekly payment | Interest saved |
|---|---|---|
| 4% | $954.83 | $44,530.60 |
| 6% | $1,199.10 | $98,220.48 |
| 8% | $1,467.53 | $183,632.27 |
Questions
Why does this work at all?
Purely because 26 fortnightly half-payments equal 13 monthly payments rather than 12. The extra one goes entirely to principal, which reduces the balance interest is charged on for the whole remaining term.
Is a biweekly program worth paying for?
No. Some services charge a fee to set this up, but the same result comes from simply paying an extra twelfth of your payment each month, or one extra payment a year, at no cost.
Will my lender accept fortnightly payments?
Many will, but some hold the fortnightly payments and only apply them monthly, which removes most of the benefit. It is worth confirming how payments are actually credited before relying on it.
Why does a higher rate save more?
Because at a higher rate a larger share of each payment is interest, so reducing the balance earlier avoids proportionally more of it. The accelerated schedule is worth most exactly when borrowing costs most.
For the standard payment this builds on, see the loan payment calculator. For an interest-only structure instead, see the interest-only mortgage calculator.