After you close on your brand new, 30-year fixed mortgage, you will be bombarded with offers in the mail about converting to a bi-weekly payment program. This is where you make a 1/2 monthly payment every 2 weeks. At the end of the year, you have made 26 half payments - the equivalent to 13 full monthly payments. That extra payment reduces your principal balance, and you could pay off your 30-year mortgage in about—wait for it—25.8 years.

The best part is that these programs will just charge you a nominal off of $3 per month and a one-time setup fee of $300 to get this program started.For a total cost of $1,228, you can pay off your mortgage 4.2 years early.

Wow. Stunning. Enter other sarcastic remarks.

I'm not a fan of these programs. The cost is too great and the benefit too small. I say, take that extra payment and drop it into your own IRA or Roth IRA account. You'll be in the extreme minority if you keep your mortgage the entire term anyway.

That said, maybe you really like the idea of a bi-weekly mortgage program because it fits better with your cash flows. If you get paid every 2 weeks, it makes sense to try to pay your bills on that schedule, too.

Here's how you can do your own bi-weekly mortgage payment program with no bank fees:

1. Open a separate checking account at your bank just for your mortgage payment.


2. Every 2 weeks, transfer 1/2 of your mortgage payment into that account.


3. When the mortgage payment is due on the first of the month, just write a check from that account emptying your checking account.

That's all there is to it. You won't pay a setup fee. You won't pay a monthly fee. And you'll still have the benefits of a bi-weekly mortgage payment program.

Wondering what else you can do with your current mortgage? Contact us today.