Bimonthly Mortgage

Bimonthly Mortgage

A mortgage on which half the monthly payment is paid twice a month.

It should be called a “semi-monthly mortgage” but market practice often trumps logic. In contrast to a biweekly, a bimonthly mortgage involves no extra payments. The 24 half payments a year add to the same total as 12 full payments. Advancing the payment by half a month saves a little interest, but the effect is negligible. A 7% 30- year loan pays off in 29 years, 11 months. Check it out with the bimonthly spreadsheet on my Web site.

References in periodicals archive ?
1 decided it made more sense to pay down more on the principal by making either biweekly or bimonthly mortgage payments.
By retaining servicing, in addition to servicing fees, the company is also now able to generate fee revenue from ancillary products, such as mortgage insurance and accelerated mortgage reduction plans like bimonthly mortgages, both of which are very popular products with borrowers, says Roy Briggs, Gateway's vice president of servicing.