What is a bi-weekly mortgage?

A bi-weekly mortgage is defined by its payment structure, which involves making payments every two weeks rather than monthly. This means that during a calendar year, there are typically 26 bi-weekly payments made instead of 12 monthly payments. The bi-weekly schedule allows homeowners to pay down their principal balance more quickly, effectively reducing the overall interest paid over the life of the loan. By making bi-weekly payments, borrowers can accelerate the amortization schedule, which leads to faster loan payoff and potential savings on interest.

This option is clearly the most accurate description of a bi-weekly mortgage, highlighting the shifting of the payment frequency from monthly to bi-weekly, which is a significant characteristic of this type of mortgage. The other options do not align with this definition; for instance, a loan with monthly payments pertains to a standard mortgage structure, while a type of loan for seniors and a loan with annual payments refer to entirely different concepts.