Biweekly Mortgage Law and Legal Definition
Biweekly mortgage is a payment plan where the borrower makes payments toward his principal and interest every two weeks instead of once monthly. It will result in the equivalent of one additional monthly payment being made each year. This extra payment is applied toward the principal balance of the mortgage, and will lead to substantial interest savings over the life of a long-term mortgage. In biweekly mortgage, payments are made each year in either 26 half payments or 13 full payments instead of 12 full payment. When a biweekly payment plan is set up, most mortgage servicing companies simply hold the first half of the monthly payment until the second half arrives and then make the full monthly payment. Fees are charged to convert an existing mortgage to a biweekly plan.
