You can pay any loan you have with biweekly payments – home mortgages, car loans, school loans, boat loans, personal loans and credit cards.  Any other fixed monthly bills such as rent, cable, daycare, cell phone – as long as the monthly amount due does not vary.

2.  Does It Make Sense For Me?

Here are just a few benefits that make sense:

- Match smaller payments to paydays.
- Payoff loans sooner and reduce debt faster.
- Save on interest charges.
- Build equity faster.
- Safe and secure payments.

3.  Does Oprah Recommend Biweekly Payments?

If Oprah took the time to talk about it on her show, then it must be good!

Equity is gained two ways:

1. Increase in the value of the home.
2. Paying down the principal balance of the mortgage.

Since the value of homes are not increasing in most places, this leaves only one option to build equity in your home…paying down the principal balance.

Have you looked at your amortization schedule lately?  Every time you make a regular monthly payment, a very small portion of that payment is applied to your principal balance.  No wonder it takes 30 years to pay off a mortgage loan.

With biweekly payments, you accelerate the amount of equity being gained in the home, by applying more to the principal balance.

Here is a comparison of equity position when paying monthly vs. biweekly:  Biweekly vs Regular Payments

The faster you build equity in your home, the faster you will be able to eliminate PMI on your mortgage loan.

Here is an example using a current mortgage rate and a typical loan amount:

A $150,000 mortgage loan at 30 years with a 5.0% interst rate will cost you $139,883.68 in interest.  That same loan, while maying biweekly payments, will only cost you $114,116.24 in interest.  That’s a savings of $25,767.24.

The numbers don’t lie and what’s great is that most people are paid biweekly, so it’s easier to manage a half payment on each payday.