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Mortgage Payments: What Are the Options

The iServe Blog

Whether you set up a formal arrangement with your lender for biweekly payments or simply take steps to send in extra money each month, taking steps to modify the way you make payments can help you save. Which option is right for you and what steps can you take to reduce the amount you send over the life of your mortgage and give you the best possible return on your investment? Paying biweekly, adding extra money each month or even paying an extra payment each year – which method is right for you? A look at our online mortgage payment calculator that compares monthly and bimonthly payments and these tips will help you decide.

Add a Bit Each Month

Every dollar you send in over the mortgage amount can reduce your principal and reduce the length of your loan, assuming you will not suffer penalties for pre-paying. Even rounding up to a whole dollar amount each month will have an impact; just be sure to specify that the lender should use the extra money on the principal amount.

Make an Extra Payment Each Year

Just making one extra payment a year can drastically reduce the amount of time you pay on your mortgage. That one mortgage payment can make a difference of five years or more, depending on your interest rate and loan amount.

Automate Your Payments

If you pay your mortgage from one check, you can automate a smaller amount to come out of your bank mid-month and have this applied directly to your principal. Even small amounts help – the cost of a meal out or a few cups of coffee can drastically reduce your mortgage principal over time in a pain-free way.

Add Bonuses or Gifts


Your annual bonus, tax refund and other windfalls can be applied directly toward paying down your mortgage; just send in these unexpected bonuses to apply to your principal. You’ll need to make sure you can apply these windfalls to your mortgage payment without penalty, but if you can, they can help you pay your home off more quickly.

Go Biweekly

Biweekly payments, or paying your mortgage every two weeks instead of once a month, allow you to make an extra payment each year and to pay down the principal more quickly. This mortgage payment option is also ideal if you get paid every two weeks, and it makes it easier to budget your income each month.

Many buyers find it is easier to budget for two smaller payments than for one large sum each month; this plan has the added bonus of paying off your mortgage more swiftly (just make sure any extra is being applied to your principal balance). Use our online calculators to decide if a biweekly payment structure is right for you.

Not sure which mortgage payment types are right for your budget and pay schedule? We can help. Contact us to speak to one of our loan officers and to learn more about your options when it comes to paying your new mortgage.