Process a Biweekly Loan

A biweekly loan requires mortgage payments every two weeks, rather than every month. Each payment is half the amount paid for a similar loan with monthly payments. Because there are 52 weeks in a year, a biweekly loan has 26 payments per year. This is the equivalent of one additional month of mortgage payments per year compared to a monthly loan.

Despite the additional yearly payment, biweekly loans have advantages that are realized over the life of the loan. Because the borrower pays more toward the mortgage early in the loan, the loan is paid off sooner, and because less is paid in interest over time, the total cost of the loan is reduced. Here are sample figures for biweekly and monthly loans for $100,000 at 6% interest with the first payment due on 01/01/08:

Biweekly: 646 payments @ $304.27; final payment = $150.27 due 10/05/32; total paid: $196,708.60.

Monthly: 359 payments @ $608.54; final payment = $612.77 due 12/01/37; total paid: $219,078.63.

To Process a Biweekly Loan

In the Loan Information section on the RegZ-LE input form, scroll down to the Days Per Year section and use the Number of Days dropdown list to select the method for calculating per diem interest used on line 901 of the 2015 Itemization input form:
- 360 - Interest is calculated based on twelve 30-day months.
- 364 - Interest is calculated based on 364 days per year.
- 365 - Interest is calculated based on 365 days per year.
Select the Biweekly checkbox.

When you select the Biweekly checkbox, the scheduled payments information is recalculated in the Payment Schedule section of the RegZ-LE and in the Amortization Schedule tool.