Biweekly Mortgage Plans: Smart Strategy or Needless Expense?

You've likely seen ads offering to save you thousands on your mortgage and cut years off your loan term—no refinancing, no credit check, and no appraisal required. These ads promote biweekly mortgage plans, and while the savings claims are mostly true, there's a simpler, better option: you can do it yourself for free.

How Biweekly Payments Work

A standard mortgage has 12 monthly payments per year. A biweekly plan takes half your monthly payment every two weeks—resulting in 26 half-payments, or 13 full payments annually. That extra payment goes directly toward your principal, reducing the balance faster and shortening your loan term.

This strategy can shave off years from your mortgage and save tens of thousands in interest over time.

What These Services Actually Do

Biweekly mortgage companies act as intermediaries. They:

Deduct half your payment from your account every two weeks

Hold your money in a trust account

Forward full payments to your lender when due

Send one extra payment per year toward your principal

In return, they charge:

A setup fee (typically $195 to $350)

Ongoing transaction and maintenance fees

Meanwhile, they collect interest on the money sitting in their trust account.

Potential Risks

If there's a mistake, mismanagement, or fraud involving the trust account, your payment may not reach your lender on time. And regardless of what went wrong, you are still responsible for making the payment.

A Free Alternative

You don’t need to pay anyone to do this for you. Simply divide your monthly mortgage payment by 12 and add that amount to each monthly payment. Be sure to mark it clearly as a principal-only payment.

With this method, you’ll:

Save more in interest

Avoid all fees

Maintain full control of your money

Achieve the same payoff results—or better

Final Thoughts

Biweekly mortgage plans can help reduce your mortgage faster, but paying a third-party service isn’t necessary. If your goal is early payoff and interest savings, you’ll benefit more by setting up extra payments on your own—at no extra cost.

It's not about the plan—it's about how you execute it.