Make sure to pay attention to mortgage interest caps on your taxes. You may not be close, but the impact is lessened if you can't deduct the interest you pay on the extra payment (might be all principal, depending). Also make sure they're actually paying the principal every two weeks versus holding the money and paying it monthly. Lastly, there are sometimes fees for prepaying or switching to biweekly, so make sure you're not spending money to try and save money.
I did the math and determined I could build wealth faster by not paying ahead and putting that money in the market. In Rex's example, I could make more than the $13.8k over 25 years by keeping that one extra payment a year and investing it. A single $1,000 payment compounds to almost $10k over 30 years (8% return) and you're doing an extra payment every year. Interest rates being ~half of annual rate of investment return helps a lot. You're basically borrowing money at 3-4% and using it to make retirement income at 8%. That said, some people just want to pay off their mortgage... but I don't fall in that camp.
I did the math and determined I could build wealth faster by not paying ahead and putting that money in the market. In Rex's example, I could make more than the $13.8k over 25 years by keeping that one extra payment a year and investing it. A single $1,000 payment compounds to almost $10k over 30 years (8% return) and you're doing an extra payment every year. Interest rates being ~half of annual rate of investment return helps a lot. You're basically borrowing money at 3-4% and using it to make retirement income at 8%. That said, some people just want to pay off their mortgage... but I don't fall in that camp.
'76 911S | '14 328xi | '17 GTI | In memoriam: '08 848, '85 944
"Here, at last, is the cure for texting while driving. The millions of deaths which occur every year due to the iPhone’s ability to stream the Kim K/Ray-J video in 4G could all be avoided, every last one of them, if the government issued everyone a Seventies 911 and made sure they always left the house five minutes later than they’d wanted to. It would help if it could be made to rain as well. Full attention on the road. Guaranteed." -Jack Baruth
"Here, at last, is the cure for texting while driving. The millions of deaths which occur every year due to the iPhone’s ability to stream the Kim K/Ray-J video in 4G could all be avoided, every last one of them, if the government issued everyone a Seventies 911 and made sure they always left the house five minutes later than they’d wanted to. It would help if it could be made to rain as well. Full attention on the road. Guaranteed." -Jack Baruth