How can a bi-weekly payment schedule benefit a mortgage borrower?

A bi-weekly payment schedule benefits a mortgage borrower primarily by reducing the principal faster. This approach divides the monthly mortgage payment in half and requires the borrower to make a payment every two weeks, resulting in 26 half-payments each year. This effectively translates to 13 full mortgage payments instead of the typical 12.

As a result, the borrower is able to pay down the principal balance more quickly, which reduces the amount of interest that accrues over the life of the loan. The more frequently you make payments towards the principal, the faster the overall debt decreases, which can lead to significant savings on interest payments over time. This method can also help borrowers pay off their mortgage ahead of schedule, enhancing financial freedom.

The other options do not accurately capture the core benefit of a bi-weekly payment schedule. For instance, it does not decrease the overall number of payments required but rather increases the total number of payments made per year. Similarly, while it can help avoid late fees if payments are made on time, that benefit does not encapsulate the primary advantage of accelerated principal reduction.