Here to stay and firmly established in U.S. mortgage market, biweekly mortgage payments are gaining momentum. First introduced into U.S. in early 1980's by several small Northeastern Banks, idea of biweekly mortgages has its origins in Canada.
This concept soon became popular choice nationally within less than a decade after it's arrival placing biweekly payment plan in forefront of Canada's mortgage industry around 1972 for several good reasons. Consider following:
1. Most people are paid weekly or biweekly, therefore, it is reasonable to have as an option "biweekly mortgage payments".
2. On a biweekly mortgage payment schedule, one half of a loan's monthly payment is made and credited to account holder every two weeks. This is equivalent to making 13 monthly payments instead of usual 12 monthly payments reducing loan's payoff time.
3. Faster accumulation of equity build up of up to 300%, plus a reduction in interest owed on loan due to your prepayment is result of using a biweekly payment schedule; that's without any increase to your monthly output. In other words, you'll get more value per dollar and save thousands as well; as much as 25% to 30% in interest over life of loan.
Combine benefits of a biweekly payment schedule with a union between an Electronic Funds Transfer (EFT) mode of account servicing that is governed by Regulation "E" of Federal Reserve to a plug into internet and you will find a super-efficient, safe, consumer-friendly method of paying a monthly obligation that won't take a huge bite from one paycheck. It doesn't take nuclear physicists to understand why this type of arrangement is frequently referred to as "Common Sense Mortgage".