A bill designed to help homeowners pay off their mortgages faster cleared the Assembly Financial Institutions and Insurance Committee today.

Bill would require financial institutions to allow homeowners to make biweekly and semi-monthly mortgage payments or pay additional amounts to their loans without any penalty. Assemblywomen Tennille R. McCoy and Shanique Speight and Assemblyman Joe Danielsen sponsored the bill.

“Splitting your monthly mortgage payment into two payments can lead to significant cost savings for homeowners,” said Assemblywoman McCoy (D-Mercer, Middlesex). “By making biweekly payments, homeowners can reduce the overall interest paid over the life of the loan and potentially shave years off their mortgage term. This approach not only helps in building equity more quickly but also provides greater flexibility in managing finances.”

Currently, some, but not all, lenders allow borrowers to make semi-monthly or biweekly payments. The bill would require financial institutions regulated by the State to provide borrowers who are in good standing with their mortgages with the flexibility to adjust their loan payments. Additionally, a homeowner would be able to make additional payments to the loan principal, reducing long-term interest costs.