Homeowners think there’s some magic to these bi-weekly payments that reduces the interest expense on their loan. The magic is in making the equivalent of 13 monthly mortgage payments per year. I don’t recommend that homeowners switch to a biweekly mortgage. It’s just not worth the bother or expense.

You can do as well by making additional principal payments. Divide your monthly payment by 12 and add that amount to your monthly mortgage payment made each month. Another way to think about if you’re paid biweekly, you’ll have two “three-paycheck” months every year. Use that money to make the additional principal payments.

Changing to required bi-monthly payments comes with bother and expense plus you’ll reduce your financial flexibility. Once you made it contractual that you’ll make these biweekly payments. With additional principal payments, you have the flexibility to skip an additional principal payment if money is tight one month.

There is another thing to remember, if you did not start your loan with bi-weekly payments the loan servicer may choose, if prevailing law allows, not to adjust the biweekly payments, leaving the additional money to accumulate as a cushion in the escrow account. If you go against my advice and pursue a biweekly mortgage, you’d want to talk to the mortgage company about how these expenses are spread over the 26 biweekly payments.

Reducing your balance is easy when you use personal budgeting discipline to accumulate the dollars to make additional principle payments.