That's awful about the extra fees. That would be enough to make me stay away
I wanted to switch to a bi-weekly payment as it saves a shitload of interest and shaves a bunch of time off the loan...
If I just do the same amount extra as a one-time payment once a year, does the math work out the same?
Paying bi-weekly does shave time off the loan, and saves some interest, but perhaps not quite as much as most people think. The main driver of why is shaves time and saves money is because you make 26 "half payments" instead of 12 "full payments". In effect you are paying an month each year. THAT's what cuts the time down.
I'd recommend taking your monthly payment and increasing it by 8-10%. You will see the same effect (paid off sooner, less interest) and you won't be paying "Pay-Map" any fees.
Just for some "pretend" numbers, if you had a $250k mortgage @4% with a 30yr term, if you paid biweekly you'd shave 4 years off the mortgage and save $28k in interest. But, if you just increased your monthly payments by 8% it will be almost identical to the bi-weekly plan (ok, you'd pay 1.2k more in interest, and +2 months, but that's pretty small on a 30 year note).
At 9% monthly overpayments you beat out the bi-weekly plan.
You could also pay the extra amount as a lump sum once a year, but the benefits won't be quite as large because you will accrue interest on that amount during the year.