Do extra mortgage payments make sense?

Citibank was kind enough to e-mail me the other day about my mortgage.  The message, with details that I have obscured, reads as follows:

Dear Malcolm N Carter:

Take 5 years and 3 months off your current mortgage and save $1,xxxxxxxxxx — all without refinancing!

The BiWeekly AdvantageSM Plan puts your mortgage on your pay schedule, potentially saving you thousands in interest. Not only does this make paying for your mortgage more convenient, it can help you pay off your mortgage years sooner. Many homeowners try to make extra principal payments, but it’s easier said than done. Let The BiWeekly AdvantageSM Plan do the work for you.

Here’s how it works:

Instead of you making 12 monthly payments per year, FNC Insurance Agency withdraws half of your monthly payment every 14 days.

FNC then sends your full mortgage payment to CitiMortgage every month, on time.

At the end of the year, you’ve made the equivalent of one extra monthly payment, which is applied against your mortgage principal.

In my naivete, I actually gave the suggestion more than a moment’s thought.  At the same time, my cynical view of banks tempered any enthusiasm for the notion that Citi proposed.  Then, I fortuitously came across a Washington Post column by Jack Gutentag on the very subject. Continue reading