I was reading a blog post about mortgages recently and noticed that it said “biweekly payments – you do this right?”. This is a tactic that’s brought up often, but I haven’t thought about it for a while. While I was very interested when I first heard about it at this point I don’t consider it very important.

The idea makes sense – if you take a regular monthly payment and pay half of it every two weeks, you’ll pay off your mortgage a lot sooner. There’s no magic in it though; it simply comes from a change in timing that results in two extra payment per year. The actual difference – if any – would come from paying slightly lower interest for the second half of the month. Other than that it’s just a way of increasing your regular payments. For many people it’s possible to just pay a little more, either by increasing the regular payments or choosing a shorter amortization. Biweekly payments could be useful for those who don’t think they can save the extra money for two weeks but I don’t plan my finances around that.

The post that brought this up was in the context of when to break a mortgage and get a lower interest rate. In that case, it might be possible that you can change from monthly to accelerated bi-weekly payments and not pay a penalty or have it count as a regular payment increase (I don’t know how banks view this), which would be good if you want to increase your payment. In any other case, if you manage your money well it seems that it isn’t really necessary.

Since I manage everything on a monthly basis I would actually prefer to have one or two larger payments per month than to keep the smaller payments and have two months with an extra payment – it’s not a big deal, but the advantages of biweekly payments aren’t that big either.

What do you think? Should everyone use biweekly payments? Do you or would you?