Mortgage Dictionary
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Biweekly Fixed-Rate Loan
A biweekly fixed-rate loan is a type of
fixed-rate mortgage
. Unlike a typical fixed-rate mortgage, the
biweekly mortgage requires payments every two weeks instead of once a month.
If the biweekly mortgage is structured so that each two-week payment is
equal to half the monthly payment of a 30-year mortgage,
the borrower makes the equivalent of 13 monthly payments during the year.
The "extra" payment makes it possible to pay off the mortgage in 18 to 20
years, rather than 30 years.
If you have a traditional 30-year, fixed-rate mortgage, you can obtain
substantially all of the benefits of the above strategy simply by making
an extra mortgage payment each year.