Biweekly versus semimonthly
| Schedule | Payments per year | Typical timing |
|---|---|---|
| Monthly | 12 | Same date each month |
| Semimonthly | 24 | Two fixed dates per month |
| Biweekly | 26 | Every 14 days |
Because a year contains 52 weeks, an every-other-week schedule normally creates 26 payments. The dates move through the calendar instead of staying on the same two dates each month.
Worked example: accelerated biweekly payments
Assume a $300,000, 30-year loan at 6.25%. The standard monthly payment is approximately $1,847.15. An accelerated biweekly plan pays half that amount, $923.58, every two weeks.
| Result | Monthly | Accelerated biweekly |
|---|---|---|
| Payment amount | $1,847.15 monthly | $923.58 every two weeks |
| Payments per year | 12 | 26 half-payments |
| Annual amount | $22,165.82 | $24,012.97 |
| Estimated payoff | 30 years | About 24.35 years |
| Estimated total interest | $364,974.58 | $283,888.88 |
Biweekly servicing methods differ. This illustration uses a periodic rate based on 26 periods per year and applies each payment immediately. Some lenders hold partial payments until a full monthly payment is received.
Why “half every two weeks” accelerates payoff
Twenty-six half-payments equal thirteen full monthly payments. The savings primarily come from paying an extra full payment each year, not simply from changing the label from monthly to biweekly.
A similar comparison can be made by adding one-twelfth of the monthly payment as a recurring extra principal amount. See the extra-payment schedule guide.
Questions to ask the lender or servicer
- Are biweekly payments applied when received or held until month-end?
- Is there a setup or transaction fee?
- Is the amount calculated as a true biweekly payment or simply half the monthly payment?
- How are extra amounts designated and posted?
- Can the same result be achieved with free monthly principal prepayments?
Build and compare the schedule
Use the free amortization calculator for a standard schedule. Use the registered Windows amortization software when you need to edit individual dates, payments, rates, or notes and save the revised loan.