What Is a Bimonthly Mortgage?

A couple looks at their mortgage balance on a phone while standing in a kitchen

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Bimonthly mortgages are structured to allow you to pay half of your monthly payment twice a month.

Bimonthly mortgages are structured to allow you to pay half of your monthly payment twice a month. If you receive two paychecks a month, this structure could make it a little more convenient to pay your bills.

Understanding the benefits and drawbacks of each potential mortgage payment structure can help a mortgage borrower prioritize what’s most important for them. For example, one borrower might prefer lower costs over the life of the loan, while another might want to align their payment structure with their paychecks. Here’s what you should know about bimonthly mortgages to decide whether one is right for you.

Definition and Examples of Bimonthly Mortgages

Bimonthly mortgages simply divide a monthly mortgage payment into two payments. One payment is typically due mid-month and one is due at the end of the month. For example, instead of making 12 monthly payments of $2,000 each year, you’d make 24 payments of $1,000 each.

Not every lender offers a bimonthly schedule for payments, so you’ll need to ask your lender about payment options.

A bimonthly mortgage may also save you some interest if your mid-month payment is applied to your principal when the lender receives it. However, most lenders offer bimonthly mortgages as a tool of convenience and don’t apply your payments until the end of the month—which means a bimonthly mortgage typically doesn’t lead to interest savings.

How Does a Bimonthly Mortgage Work?

Mortgage payments are typically calculated based on the loan’s term, the interest rate, and an amortization schedule that divides up your costs into monthly payments. If you opt for a bimonthly mortgage, your lender will create an amortization schedule with two payments each month instead of one.

A bimonthly schedule might be a good option for homeowners who get paid twice a month and would prefer to plan for two smaller payments rather than one large end-of-month payment. Rather than saving up all month, you could make your payment as soon as your paycheck arrives—or make it even more convenient by automating the payments.

Bimonthly Mortgages vs. Biweekly Mortgages

Bimonthly mortgages are subtly different from biweekly mortgages. A bimonthly mortgage requires a payment on average every 15 days, while a biweekly mortgage requires a payment every 14 days. That difference might not seem like much, but over the course of a year, a biweekly mortgage includes 26 payments, while a bimonthly mortgage would only have 24 payments.

Those two extra payments add up to the equivalent of an extra monthly mortgage payment and can help you pay down your mortgage a little faster, saving you interest over the life of the loan.

Unlike a bimonthly mortgage, twice a year, a biweekly mortgage will require three payments in a month instead of two. Before choosing this mortgage payment structure, make sure you have a plan to budget for those extra payments.

Other Alternatives to Bimonthly Mortgages

Of course, there’s no need to pay bimonthly or biweekly. You could simply stick to the traditional monthly mortgage payment schedule.

If your goal is to save money by paying less interest on your mortgage, you could aim to make extra mortgage payments, which will typically be applied to the principal. But before you do so, check to make sure your loan doesn’t have a prepayment penalty, which is a fee for paying more than your monthly payment. Sometimes this penalty only applies when you pay off the balance early (such as if you sell your home or refinance), but it may apply to any extra payments. Before choosing a loan with a prepayment penalty, make sure you discuss with your lender what circumstances trigger that charge.

If your mortgage has a prepayment penalty, create a special savings account and funnel extra money into it, then apply it to your mortgage after the penalty period ends. For example, most prepayment penalties only apply to the first three years of the loan, but after that, you could use your savings to pay down your principal without a fee.

If your mortgage doesn’t have a prepayment penalty, you can DIY a bimonthly mortgage by simply making a partial payment in the middle of the month and paying the rest at the end of the month. Just make sure that you’ve paid the full payment by the monthly payment due date.

Key Takeaways

  • Bimonthly mortgage payments involve dividing a monthly payment in two and paying 24 payments a year.
  • This payment structure differs from a monthly mortgage (12 payments a year) and a biweekly mortgage (26 payments per year).
  • In some cases, paying your mortgage a little more frequently will save you a small amount in interest. However, this depends on your lender and loan agreement, and the main benefit is typically convenience, not savings.

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