Whether you take out a 15- or 30-year mortgage, you usually owe one payment a month. While you can make a single payment each month, some people decide to divide their mortgage payments into two or even four separate payments monthly. They pay the same amount a month, but are able to pay the mortgage off more quickly. Companies exist that offer to make two monthly payments on your mortgage, often for a price.
Weekly mortgage payments mean you will pay a quarter of the monthly amount due each week. If your mortgage is $1,600 per month, you will pay $400 a week. Over a year, you will pay considerably more towards your mortgage than if you pay monthly. If you make 52 $400 payments, you will pay $20,800 per year. If you choose to pay $1,600 monthly, you will only pay $19,200 after 12 months.
With bi-weekly payments, you pay half of your monthly mortgage twice a month. That means you will make two $800 payments on a $1,600 mortgage instead of a single $1,600 payment. As with the weekly payments, you will end paying off your mortgage more quickly if you pay every other week. If you make 26 payments of $800, you end up paying $20,800, the same amount you would pay making weekly payments, compared to $19,200 for monthly payments.
Advantages vs. Drawbacks
The major advantage of paying weekly or bi-weekly is that you pay an extra month's worth of your mortgage each year. According to Dana Dratch of Bankrate.com, the extra payment each year means you could pay your mortgage off six to eight years ahead of schedule. The exact length of time depends on the terms of your mortgage. Weekly payments or bi-weekly payments may be difficult for some people, though. For example, if you get paid once a month, it may be hard to budget for four or two separate payments instead of a single payment. If you are paid bi-weekly, making bi-weekly mortgage payments may make more sense.
In some cases, programs for making bi-weekly or weekly payments come with fees. Companies offer to automatically make the payments for you, but only for a price. The price can include an upfront, non-refundable fee of up to several hundred dollars, as well as a much smaller fee with each payment. In some cases, the fees may make the program not worth it, as you end up paying what you would save on your mortgage in fees. If you are interested in paying your mortgage once a week or every other week, check with your lender to make sure you can make payments yourself more than once a month. Some lenders only accept a single payment a month.