A biweekly mortgage calculator helps you determine the cost of your home loan when payments are made every two weeks, instead of the traditional monthly schedule. This approach not only accelerates your mortgage repayment but also reduces the amount of interest paid over time. Including taxes and insurance in this calculation ensures that you have a complete picture of what each payment will entail, avoiding any surprises.
Formulas
- Loan Amount
- Loan Amount = Home Price – Down Payment
- Monthly Interest Rate
- Monthly Interest Rate = Annual Interest Rate / 12
- Number of Monthly Payments
- Total Payments = Loan Term * 12
- Monthly Mortgage Payment
- Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 – (1 + Monthly Interest Rate)^-Total Payments)
- Monthly Taxes and Costs
- Monthly Property Taxes = Property Taxes / 12 Monthly Home Insurance = Home Insurance / 12 Monthly Other Costs = Other Costs / 12
- Total Monthly Payment (including taxes and costs)
- Total Monthly Payment = Monthly Payment + Monthly Property Taxes + Monthly Home Insurance + Monthly Other Costs
- Total Cost Over 360 Payments
- Total Cost = Total Monthly Payment * Total Payments
- Total Interest Paid (Monthly)
- Total Interest (Monthly) = Total Cost – Loan Amount
- Biweekly Interest Rate
- Biweekly Interest Rate = (1 + Monthly Interest Rate)^(1/2) – 1
- Biweekly Payment
- Biweekly Payment = (Loan Amount * Biweekly Interest Rate) / (1 – (1 + Biweekly Interest Rate)^-(Total Payments * 2))
- Total Interest Paid (Biweekly)
- This is calculated iteratively, by summing up the interest paid at each biweekly period until the loan is paid off: Total Interest (Biweekly) = Sum of (Remaining Balance * Biweekly Interest Rate) over all payment periods
- Savings with Biweekly Payments
- Total Savings = Total Interest (Monthly) – Total Interest (Biweekly)
Tables and Tools
Here’s a simple table that explains some of the key terms associated with biweekly mortgage calculations. This will help users understand the components that affect their mortgage payments.
| Term | Definition |
|---|---|
| Loan Amount | The total amount of money borrowed, minus the down payment. |
| Biweekly Payment | The amount paid every two weeks on the mortgage. |
| Monthly Interest Rate | The annual interest rate divided by 12 (representing each month). |
| Biweekly Interest Rate | Calculated from the monthly interest rate, adjusted for the shorter payment interval. |
| Total Payments | The total number of payments made over the life of the loan, whether monthly or biweekly. |
| Monthly Property Taxes | The annual property tax amount divided by 12. |
| Monthly Home Insurance | The total yearly home insurance premium divided by 12. |
| Total Monthly Payment | The sum of the monthly mortgage payment, property taxes, home insurance, and any other costs. |
| Total Biweekly Payment | The sum of biweekly mortgage payments over the entire term of the loan. |
| Total Interest Paid | The total amount of interest paid over the life of the loan, calculated for both monthly and biweekly terms. |
| Savings with Biweekly Payments | The difference in total interest paid between monthly and biweekly payment plans. |
Example
Let’s walk through an example calculation using a hypothetical scenario:
Home Price: $300,000
Down Payment: 20% ($60,000)
Loan Amount: $240,000
Annual Interest Rate: 5%
Loan Term: 30 years
Annual Property Taxes: $3,600
Annual Home Insurance: $1,200
Calculations
- Monthly Interest Rate
Monthly Interest Rate = (Annual Interest Rate / 12) = (5% / 12) = 0.4167% - Monthly Mortgage Payment (excluding taxes and insurance)
Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 – (1 + Monthly Interest Rate)^(-360))
Monthly Payment = (240,000 * 0.004167) / (1 – (1 + 0.004167)^(-360)) ≈ $1,288.37 - Monthly Property Taxes
Monthly Property Taxes = Annual Property Taxes / 12 = $3,600 / 12 = $300 - Monthly Home Insurance
Monthly Home Insurance = Annual Home Insurance / 12 = $1,200 / 12 = $100 - Total Monthly Payment
Total Monthly Payment = Monthly Mortgage Payment + Monthly Property Taxes + Monthly Home Insurance
Total Monthly Payment = $1,288.37 + $300 + $100 = $1,688.37 - Biweekly Interest Rate
Biweekly Interest Rate = (1 + Monthly Interest Rate)^(1/2) – 1
Biweekly Interest Rate = (1 + 0.004167)^(1/2) – 1 ≈ 0.002081 - Biweekly Payment
Biweekly Payment = (Loan Amount * Biweekly Interest Rate) / (1 – (1 + Biweekly Interest Rate)^(-Total Payments * 2))
Biweekly Payment = (240,000 * 0.002081) / (1 – (1 + 0.002081)^(-780)) ≈ $593.99 - Total Monthly Payments vs. Biweekly Payments
- Monthly Payments Over 30 Years: $1,688.37 * 360 = $607,813.20
- Biweekly Payments Over 30 Years: $593.99 * 780 = $463,312.20
- Total Savings with Biweekly Payments
Total Savings = Total Monthly Payments – Total Biweekly Payments
Total Savings = $607,813.20 – $463,312.20 = $144,501
This example clearly shows how making biweekly payments can reduce the total interest paid and the total cost of the mortgage over time, demonstrating the financial benefits of this approach.
Most Common FAQs
It’s a tool that calculates the amount of your mortgage payments when made every two weeks, incorporating costs like taxes and insurance for complete accuracy.
By paying half your monthly mortgage payment every two weeks, you’ll make 26 half-payments per year, which equates to 13 full monthly payments. This extra payment per year accelerates your payoff schedule and reduces your total interest.
Yes, including these costs in your biweekly payments helps ensure there are no surprises in your budgeting, giving a more accurate financial planning tool.