Every lender offers a menu of payment frequencies, and most of them come with a line about how paying more often "saves you thousands." Some of that is true. Most of it is a misunderstanding about where the saving actually comes from.
Here is the whole thing on one mortgage: $400,000 at 3.90%, amortized over 25 years, using the semi-annual compounding Canadian fixed-rate mortgages use.
| Frequency | Payment | Paid per year | Total interest | Paid off in |
|---|---|---|---|---|
| Monthly | $2,082 | $24,989 | $224,736 | 25.0 years |
| Semi-monthly | $1,040 | $24,969 | $224,233 | 25.0 years |
| Biweekly | $958 | $24,968 | $224,193 | 25.0 years |
| Weekly | $479 | $24,958 | $223,962 | 25.0 years |
| Accelerated biweekly | $1,041 | $27,146 | $192,435 | 21.8 years |
| Accelerated weekly | $521 | $27,146 | $192,091 | 21.8 years |
Two things jump out.
Frequency on its own barely matters
Monthly, semi-monthly, biweekly and weekly all pay off in exactly 25 years, and the difference in lifetime interest between the most and least frequent is $774. Over a quarter of a century. That's the "paying more often means less interest accrues" effect, and it's real, but it's roughly a nice dinner, not a renovation.
The reason is simple: a regular biweekly payment is worked out so that 26 of them add up to the same annual total as 12 monthly ones. You're paying the same amount of money, just in smaller pieces. The mortgage doesn't much care about the pieces.
"Accelerated" is where the money is
The two accelerated options save about $32,000 and clear the mortgage three years and two months early. That's not a trick of timing. Look at the "paid per year" column: they cost $2,157 more a year.
An accelerated biweekly payment is the monthly payment divided by two, paid every two weeks. There are 26 two-week periods in a year, not 24, so you end up making the equivalent of 13 monthly payments instead of 12. The extra one goes straight to principal, every year, and that's what does the work.
In other words: accelerated payments save money because you pay more, not because you pay more often. Anyone who prefers monthly can get the same result by rounding the payment up by about 8.3%, or by making one extra monthly payment as a lump sum each year. Same arithmetic, different plumbing.
What it looks like at the five-year mark
Because most people don't hold a mortgage for 25 years at one rate, the shorter view is worth having. After five years on the mortgage above:
| Monthly | Accelerated biweekly | |
|---|---|---|
| Interest paid | $72,554 | $71,153 |
| Balance remaining | $347,607 | $335,794 |
The interest difference over five years is modest. The balance difference is nearly $12,000, which matters in two situations: at renewal, where a lower balance means a lower payment or a shorter path; and if you ever break the mortgage, where a smaller balance means a smaller penalty.
Choosing, then
A few things that tend to settle it:
Match your pay cycle. If you're paid biweekly, a biweekly mortgage payment lands with each cheque and the budget is easier to run. That's a good reason on its own, and it's the reason most people pick it. The saving from frequency alone is a rounding error; don't choose weekly for the money.
If you can afford the accelerated version, it's the simplest prepayment there is. No lump sums to remember, no phone calls, no forms. It just quietly pays the mortgage off three years early. Most lenders let you switch to it at any time, and most count it under a "payment increase" privilege rather than the lump-sum one, so it usually doesn't use up your annual prepayment room. Check your contract.
If cash flow is tight, don't. The extra $180 a month is only worth it if it isn't coming from a credit card. A mortgage at 3.90% is the cheapest money most people will ever borrow, and paying it down faster is only a saving if the alternative isn't debt at 20%.
Flexibility has a price and a value. The accelerated payment is a commitment; a yearly lump sum is a choice you make each year. They cost the same and save the same. Which one suits you is about temperament, not maths.
The fine print
These figures are estimates for one illustrative mortgage. Your rate, balance and contract terms will produce different numbers, and lenders calculate biweekly and weekly payments slightly differently from one another. Nothing here is a recommendation. If you're deciding whether to break a mortgage rather than how to pay one, the calculator handles that comparison.