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Bill

S 3525

Requires financial institutions to allow mortgagors to make biweekly and semi-monthly payments and payments to mortgage principal.*

2024-2025 Regular Session Introduced by Reginald Atkins and 19 co-sponsors

New Jersey requires mortgage lenders to offer borrowers biweekly/semi-monthly payment options and penalty-free additional principal payments to accelerate equity building.

Approved P.L.2025, c.56.
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Bill Summary · S 3525

Legislative bill overview

S 3525 requires New Jersey financial institutions to offer mortgagors the option to make biweekly and semi-monthly mortgage payments, in addition to standard monthly payments, and to allow borrowers to make additional principal-only payments without penalty. The bill became law in May 2025 after passing both chambers with overwhelming bipartisan support.

Why is this important

Biweekly payments result in 26 half-payments per year (equivalent to 13 full monthly payments), allowing borrowers to pay down principal faster and reduce total interest paid over the life of the loan. This gives homeowners a voluntary tool to build equity more quickly and potentially save thousands in interest, while semi-monthly options provide payment flexibility that better aligns with some borrowers' pay schedules.

Potential points of contention

  • Administrative costs: Banks may incur expenses processing additional payment frequencies, which could theoretically be passed to consumers through higher fees or rates
  • Market impact disparity: Borrowers with higher incomes and discipline benefit most; lower-income borrowers may not utilize the option or could face payment sustainability challenges
  • Narrow scope: The law only addresses payment frequency options but doesn't address other barriers to principal reduction, such as loan terms, interest rates, or refinancing restrictions

Compiled from official sources — confirm details with the bill’s official record.

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