Accelerated Biweekly Mortgage Payments

Accelerated biweekly mortgage payments are semi-monthly payments made every 2 weeks, structured to equal 13 monthly payments per year rather than 12, thereby reducing interest costs and shortening the time to pay off a mortgage.

Accelerated Biweekly Mortgage Payment – Quick Facts

• Payments occur every 14 days
• Total yearly payments equal 26 semi-monthly payments
• Creates 1 extra monthly payment per year
• Reduces total interest over the life of the mortgage
• Speeds up principal repayment without increasing the contract rate

“Accelerated payments can save you money on interest charges. By accelerating your payments, you make the equivalent of one extra monthly payment per year.”  — Financial Consumer Agency of Canada (FCAC)

What Are Accelerated Biweekly Payments?

Accelerated biweekly mortgage payments are a smart repayment strategy that helps Canadian borrowers reduce interest costs and shorten their amortization without increasing their mortgage rate or renegotiating their terms. Instead of making a mortgage payment once a month or every two weeks on a standard schedule, accelerated biweekly payments divide the monthly payment in half and make that half-payment every 14 days. Because there are 26 biweekly periods in a year, borrowers end up making 13 monthly payments instead of 12.

Accelerated biweekly payments create a subtle but powerful repayment advantage. Borrowers make 1 additional full monthly payment per year, without increasing the amount of each payment. Over several years, this additional amount compounds into faster principal reduction and meaningful interest savings.

Why Do Accelerated Biweekly Payments Matter?

Accelerated biweekly payments align well with how Canadian lenders calculate interest. Most lenders charge interest semi-annually or monthly, but the accelerated structure reduces the outstanding principal more frequently. Lowering the principal earlier in the mortgage amortization means less interest over time.

Borrowers often choose accelerated biweekly payments for two reasons. First, the payment amount feels manageable because each payment is half a standard monthly payment. Second, the cumulative effect of the annual extra payment shortens the remaining amortization by several years.

How Accelerated Biweekly Payments Compare to Other Payment Frequencies?

Accelerated biweekly payments shorten amortization without changing the interest rate or mortgage type.

Biweekly Payments

Standard biweekly payments occur every 2 weeks but total only 12 monthly payments per year. They help with budgeting, but do not offer a significant reduction in amortization.

Semi-Monthly Payments

Semi-monthly payments occur twice per month, usually on the 1st and 15th. This results in exactly 24 payments per year, with no acceleration.

Monthly Payments

Monthly payments are the simplest structure but result in the slowest principal reduction because interest accrues over longer intervals between payments.

How Do Lenders Use Accelerated Biweekly Payments?

Canadian lenders typically present multiple payment frequency options during the loan approval process. Accelerated biweekly is offered as a cost-neutral strategy to reduce interest over time. The payment frequency does not affect the contract rate or the qualifying rate. However, amortization impact may affect suitability for borrowers near the GDS or TDS thresholds, who are typically qualified based on monthly payments.

Some lenders allow borrowers to switch between payment frequencies during the term, provided the change does not require a mortgage amendment. Accelerated biweekly payments do not qualify as a prepayment privilege, and the additional annual payment provides a similar financial benefit.

Example Calculation of Accelerated Biweekly Payments

Imagine a borrower with the following mortgage terms:

• Mortgage amount: $500,000
• Contract rate: 5 percent
• Amortization: 25 years
• Monthly payment: $2,908

Step 1: Divide the monthly payment in half

$2,908 ÷ 2 = $1,454

Half of the monthly payment is applied as an accelerated biweekly payment.

Step 2: Multiply by 26

$1,454 × 26 = $37,804

Over 26 biweekly payments are the total annual repayment.

Step 3: Compare to the standard annual repayment

$2,908 × 12 = $34,896

Extra repaid annually

$37,804 − $34,896 = $2,908

You effectively make one additional monthly payment each year.

Impact

That single extra payment reduces the principal faster and shortens the amortization by several years, depending on your mortgage size and interest rate.

Common Mistakes and Misunderstandings for Accelerated Biweekly Payments 

• Confusing standard biweekly with accelerated biweekly payments
• Assuming accelerated biweekly requires lender approval
• Believing accelerated payments increase the mortgage rate
• Forgetting that biweekly payment dates shift each month, but keep the same weekday schedule
• Expecting accelerated payments to count as prepayments
• Not budgeting for months with 3 biweekly withdrawals

Frequently Asked Questions (FAQ) About Accelerated Biweekly Payments

Related Terms

• Mortgage Prepayment
• Amortization
• Payment Frequency
• Contract Rate
• Qualifying Rate
• Semi-Monthly Payments