What describes a mortgage payment schedule based on payments every 2 weeks resulting in one extra payment per year?

The choice of a bi-weekly mortgage payment schedule accurately reflects a payment structure that involves making payments every two weeks. This approach leads to 26 payments in a year, which amounts to 13 full monthly payments instead of the standard 12. The additional payment, made due to the bi-weekly schedule, can significantly reduce the outstanding principal balance over time, leading to savings on interest costs and potentially shortening the loan term.

This payment method contrasts with a monthly mortgage payment schedule, which only accounts for 12 payments each year, and thus doesn’t benefit from the additional contribution toward the principal that a bi-weekly structure provides. A bimonthly mortgage payment schedule, while it may sound similar, would typically denote payments made twice a month, resulting in 24 payments each year, rather than the 26 associated with bi-weekly payments. An annual mortgage payment would involve a single payment made each year, which fundamentally differs from the periodic payments involved in a bi-weekly plan.