What Is the Risk of a Biweekly Payment Program?

Some biweekly payment programs — especially those run by third-party companies other than the lender that sends your loan statements to you each month–will charge fees for this service.

They can charge significant upfront fees, plus small fees along the way for each biweekly payment processed. It can take up to 10 years for participants in up-front-fee plans to recoup their costs — and if you sell or refinance before that time, the fees exceed any savings potential.

The Consumer Financial Protection Bureau — which is the mortgage industry’s primary regulator — has taken a dim view of these fee practices. This is a good thing for consumers, because it helps weed out high-fee vendors.

Still, it’s difficult to know which third-party providers you can trust, so the best practice is to only set up a biweekly payment plan with the lender that sends your loan statements each month.

In most cases, your lender won’t charge fees for this service. Ask your lender to brief you on their biweekly plan terms.


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