What’s a bi-weekly period as in a bi-weekly mortgage plan?
A bi-weekly period is every two weeks and when it relates to a payment plan, you would make a payment every two weeks to a total of 26 payments during the year. A bi-weekly payment plan is ideal for paying off a loan or mortgage in a shorter time frame, which results in interest savings.
When compared to a monthly payment schedule where there is one (larger) payment made every month, smaller bi-weekly payments are made every two weeks so the result is that you would make two more payments a year, than if you were paying twice a month, which would result in 24 payments.
With a bi-weekly payment or payroll plan, the actual dates will vary and the term is set by the first date stated for the bi-weekly period. Over the year, three bi-weekly payments will fall during the same month and this will happen twice, since the amount of days in calendar months tend to vary.
Bi-weekly should not be confused with bi-monthly which is a period of every two months. It’s also not the same as terms of twice a month, which are usually the 1st and 15th of the month.