True Biweekly (Simple Interest Biweekly) versus Standard Biweekly
This calculator will show you how much you will save if you calculate interest for two-week
intervals and apply the biweekly payments less the interest to reduce principal every two weeks (in other words,
if you set up a true biweekly (sometimes called simple interest biweekly) payment schedule), instead of having
your money withdrawn from your bank account every two weeks by your lender and making a full mortgage payment
once a month plus one additional payment once a year out of a special account, managed by the lender (pseudo
biweekly or standard biweekly payments).
The pseudo biweekly (or Standard Biweekly) payment plan is what most borrowers get when they convert their loan from monthly to biweekly payments. The
biweekly payments are credited to a special account managed by your lender, and on the 1st of the month, as with standard payments, the monthly payments are made out of that
account. The excess amount accumulated in the special account by the end of each year is equal to a full monthly payment. At this point your lender makes a double payment. The only
similarity between the true biweekly and the pseudo biweekly (or Standard Biweekly) is having your money withdrawn from your bank account every two weeks.
We are not affiliated with any lending institution and don't offer guidance on how to set up a biweekly payment schedule with your mortgage lender. You should receive
professional financial advice when considering switching to a biweekly payment plan.
The calculation results are for illustrative purposes only and are not guaranteed to be accurate.