On a $300,000 loan at 5% over 25 years, paying $876.89 every two weeks instead of monthly saves $36,521 in interest and ends the loan 3.5 years sooner.
- Interest, biweekly
- Interest saved
| Amount | Biweekly payment | Interest, biweekly | Interest saved | Years saved |
|---|---|---|---|---|
| $100,000 | $292.30 | $63,203 | $12,174 | 3.5 |
| $150,000 | $438.44 | $94,805 | $18,261 | 3.5 |
| $200,000 | $584.59 | $126,406 | $24,348 | 3.5 |
| $250,000 | $730.74 | $158,008 | $30,435 | 3.5 |
| $300,000 | $876.89 | $189,610 | $36,521 | 3.5 |
| $400,000 | $1,169.18 | $252,813 | $48,695 | 3.5 |
| $500,000 | $1,461.48 | $316,016 | $60,869 | 3.5 |
| $600,000 | $1,753.77 | $379,219 | $73,043 | 3.5 |
| $750,000 | $2,192.21 | $474,024 | $91,304 | 3.5 |
| $1,000,000 | $2,922.95 | $632,032 | $121,738 | 3.5 |
How it is computed
The monthly payment M = P × i ÷ (1 − (1 + i)^−n) is halved and paid 26 times a year, which adds the equivalent of one extra monthly payment each year. Interest saved = total interest of the monthly schedule − total interest of the biweekly schedule. The two stacked bars add up to the interest of the monthly schedule.
FAQ
Why do biweekly payments save interest?+
26 half-payments equal 13 monthly payments a year instead of 12; the extra payment goes entirely to principal.
Is biweekly the same as semi-monthly?+
No. Semi-monthly means 24 payments a year, which is the same total as monthly and saves almost nothing.