Biweekly mortgages can save you money

A true biweekly mortgage has a biweekly payment equal to one-half a regular monthly payment for that term. This reduced payment is then made biweekly. Essentially, you are making the equivalent of a 13th monthly payment each year.

Making biweekly payments this way will save you an impressive amount of money in interest. You will build equity faster. You'll pay off your loan sooner – usually around 23 years on a 30 year mortgage. It also makes mortgage payments easier to budget – especially if your paycheck is biweekly or weekly.

The chart below illustrates typical savings on a $100,000 mortgage.

Compare	Monthly Payment	Biweekly Payment
Principal Balance	$100,000	$100,000
Annual Percentage Rate*	7.25%	7.25%
Principal + Interest Payments	$682.18	$341.09
Term in Years	30	23.4
Total Interest	$145,580.04	$107,443.93
Interest Savings	$0	$ 38,136.11

* This rate is for illustration purposes. Current rates may vary.

Biweekly mortgages are typically fixed rate. At DCU, they're available in 15, 20, and 30 year terms on fixed-rate Conventional and Jumbo Mortgages. Automatic payment by transfer from your DCU savings or checking account is required.

Can't I just make more principal payments?

Yes, you can make extra payments toward your principal; however, research shows that even among those who have good intentions, more than 90% do not make these extra payments on a consistent basis. The biweekly payment provides the discipline and structure that can help save you thousands.

Not all biweekly mortgages are equal

The true biweekly is automatically designed to help you pay off your loan sooner. When you are shopping for a biweekly, consider the following.

Make sure you don't have to pay a higher rate for choosing a biweekly mortgage. DCU does not charge a higher rate, but most lenders do.
Find out if there is an extra fee for going biweekly. You should not have to pay one.
Ask when the mortgage is actually scheduled to be paid off. If you choose a 30-year biweekly and it pays off in 30 years, it's not a true biweekly. The lender is just amortizing the loan over 26 payments per year instead of a normal monthly payment divided in half that's paid every two weeks. All you would get otherwise is a more convenient payment schedule.

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Digital Federal Credit Union
220 Donald Lynch Boulevard
PO Box 9130
Marlborough, MA 01752-9130
508.263.6700 • 800.328.8797

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