Biweekly Program for Mortgage: Is It Really Advantageous?

Many Lenders provide a biweekly option to mortgage payments along with the monthly option. Its told with the biweekly options you can bring down your mortgage term by 6-7 years.  So, what are the extra overheads of biweekly program and is it really worth?

Lenders usually charge a fees for setting up biweekly programs.The fees various from $0-$300 and There is an extra transactions fee  which varies from about $1.5-$3 per transaction. In biweekly program you would  be paying every 2 weeks i.e you would end up making 13 months mortgage payments instead of 12 months mortgage payments as in monthly programme  i.e you pay 1 month of mortgage payment extra.So, if you divide this extra one month mortgage into 12 months and pay that extrea amount each month you be  saving 6-7 years of mortage term  saving same as in bi-weekly programme. This would be a pseudo biweekly program and You would  also be saving upon on transaction fees that you have to give with each transaction and the Initial fees to setup the bi-weekly account.

These sites provide you with mortgage calculator to compare the two. 

Normal  

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

Bi-weekly

http://www.bankrate.com/calculators/mortgages/bi-weekly-mortgage-calculator.aspx