Real Estate Term of the Day: Biweekly Loan

Real Estate Term of the Day: Biweekly Loan

BIWEEKLY LOAN – a mortgage which requires principal and interest payments at two-week intervals.  The payment is exactly half of what a monthly payment would be.  Over a year’s time, the 26 payments are equivalent to 13 monthly payments on a comparable mortgage loan.  As a result, the loan will amortize much faster than loans with monthly payments (Barron’s Dictionary of Real Estate Terms)

See also: AMORTIZATION: LOAN, SCHEDULE, TERM

For example, the monthly payment on a $200,000 mortgage with a 30 year term at 6% would equal approximately $1199.10/month (not including taxes & insurance).  By requesting a biweekly mortgage you would save over $47,000 in interest payments and reduce the life of the loan by 5.17 years.

Check out my FREE mortgage accelerator calculator to see how you a biweekly loan could save you $$.


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