In his Aug. 5 item entitled "Borrower Can Set Up Biweekly Schedule," Robert Bruss makes two misstatements that perpetuate incorrect myths surrounding bi-weekly mortgage payments.
First he states, "The idea behind the biweekly mortgage plans is yhou make 13 monthly payments each year instead of 12. . . ." Not only is that not the purpose but, secondly, how can 26 biweekly payments possibly equal 13 "monthly" payments during a year?
The true "idea" behind biweekly payments originated in Canada, where a tremendous portion of wage earners is paid biweekly. The intent wsa not to save borrowers any money; this saving was a byproduct of this program designed to make it convenient for employees to make their mortgage payments by having them taken out of each biweekly paycheck.
The benefits to the mortagor are staggering. Why? Because by paying principal 26 times a year instead of 12, not onl yis the interest saved substantial (about one-third less than the interest on a monthly-paid mortgage), but the number of years of making payments can be reduced by one-third to one-half comapred to a 30-year 360-payment plan.