A biweekly mortgage payment plan involves making payments every two weeks, which can help you save on interest and pay off your mortgage faster. Instead of making 12 monthly payments, you make 26 biweekly payments, effectively making an extra monthly payment each year.
The formula to calculate the biweekly mortgage payment is:
\[ P = \frac{A \times i \times (1 + i)^{n \times 12}}{(1 + i)^{n \times 12} - 1} \times \frac{1}{2} \]
Where:
Let's assume you have a mortgage amount of $200,000 with an annual interest rate of 5% and a loan term of 30 years. The biweekly mortgage payment calculation would be as follows:
\[ P = \frac{200,000 \times 0.004167 \times (1 + 0.004167)^{360}}{(1 + 0.004167)^{360} - 1} \times \frac{1}{2} \]
Calculating the above expression gives a biweekly payment of approximately $536.82.