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.

See also:   Fixed-Rate Mortgage | Adjustable-Rate Mortgage (ARM)