A bi-weekly mortgage payment plan is a payment schedule where borrowers make payments every two weeks instead of the traditional monthly payment. This means that instead of making 12 monthly payments in a year, borrowers make 26 half payments, which is equivalent to 13 full payments. This extra payment per year can help borrowers pay off their loans faster and save money on interest over the life of the loan.

Let's consider an example to understand how a bi-weekly payment plan can benefit Boston residents. Suppose a Boston resident has a 30-year fixed-rate mortgage of $300,000 with an interest rate of 4%.

With the traditional monthly payment plan, the borrower would make 360 monthly payments of approximately $1,432.25. Over the course of the loan, the borrower would pay a total of $515,610.00 in principal and interest.

However, if the borrower switches to a bi-weekly payment plan, they would make 26 half payments of approximately $716.13. The total amount paid in a year would be $18,618.38, which is equivalent to 13 full monthly payments. By making this extra payment each year, the borrower can save a significant amount of money on interest and pay off the loan faster.

By switching to a bi-weekly payment plan, the borrower can reduce the loan term by several years and save thousands of dollars in interest. In the example above, the borrower would pay off the loan in approximately 25 years instead of 30 years, saving around $39,000 in interest.

It's important to note that not all lenders offer bi-weekly payment plans, and some may charge additional fees for this service. Therefore, it's advisable for Boston residents to check with their lenders to see if this option is available and if any fees apply.

References:

• Bankrate: https://www.bankrate.com/mortgages/biweekly-mortgage-payment-plan/
• Investopedia: https://www.investopedia.com/terms/b/biweeklymortgage.asp