Making extra mortgage payments reduces interest cost

Q: My son found that splitting his single mortgage payment about two weeks apart into two payments saves him considerable interest and, therefore, less total amount owed over the length of the mortgage. I asked my credit union where we have our mortgage, and they said they were unable to do this same thing. Have you heard of this plan? What is your opinion? --- V.A.

A: There's no magic to a biweekly mortgage payment plan. You can always save on mortgage interest by sending in extra money to pay off the loan more quickly than scheduled. And that's what your son will be doing.

Your son is not making those half-payments twice a month. He's making them every two weeks, which is a different thing altogether.

A couple of times a year he'd owe a payment on, for example, the first of the month, two weeks later on the 15th and again at the end of the month. Because every two weeks means 26 times a year, he'd be sending in the equivalent of one extra full payment annually. Nothing wrong with that if it suits his income schedule and he likes the enforced saving.

Trying to do that on your own would evidently upset your lender's computer program. If you want to accomplish the same thing, just send in one full extra payment a year on a separate check, clearly marked, "to be applied entirely to principal reduction."

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.