What is a bi-saver mortgage?

by Matt Killikelly

A bi-saver takes an existing loan and essentially forces the borrower to pre-pay principal toward a loan in order to shorten the term.

There are two issues I do not like about bi-savers. First, bi-savers usually have a fee attached, anywhere from $200-$600 yearly for the servicing. The second issue is the way they are sold -- most customers don't realize that it's not the fact that the payments are made bi-weekly that makes them save more, it's the fact that by paying bi-weekly the client actually pays more money towards their mortgage over the year and that's what makes the savings.

Tags: mortgage pmi bisaver amortization