A bi-weekly mortgage payment plan is a payment schedule where borrowers make payments every two weeks instead of the traditional monthly schedule. This results in 26 half-payments each year, which is equivalent to 13 full monthly payments. By making an extra payment each year, borrowers can pay off their loans faster and save on interest.

Let's consider an example to understand the benefits of a bi-weekly mortgage payment plan. 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 monthly payment would be approximately $1,432.

However, with a bi-weekly payment plan, the borrower would make half of the monthly payment, or $716, every two weeks. Since there are 52 weeks in a year, this results in 26 half-payments, which is equivalent to 13 full monthly payments. This additional payment goes directly towards reducing the principal balance of the loan.

By adopting a bi-weekly payment plan, the Boston resident can save a significant amount of money over the life of the loan. The extra payment each year helps to reduce the principal balance faster, which in turn reduces the amount of interest that accrues over time.

According to research by the Mortgage Bankers Association, borrowers who switch to a bi-weekly payment plan can pay off their mortgage an average of 6-8 years earlier. This can result in substantial savings in interest payments, potentially amounting to tens of thousands of dollars.

It's important to note that not all lenders offer bi-weekly payment plans, and some may charge additional fees for this service. Therefore, Boston residents interested in adopting this payment plan should discuss the options with their lenders and carefully evaluate the terms and conditions.

In conclusion, a bi-weekly mortgage payment plan can help Boston residents pay off their loans faster by making an additional payment each year. This reduces the principal balance faster, resulting in significant interest savings over the long term.