Home Loan Repayments: Monthly, fortnightly or weekly?

Have you ever considered how the frequency of your home loan repayments could affect how much you pay overall?

Most people choose to line up their home loan repayments with their paycheck, which is a relatively smart idea, but you could be putting yourself in a better position if you switched to paying on a fortnightly or weekly basis.

How so? Let’s say you’re making monthly repayments of $1,000, which adds up to $12,000 a year. If you changed to repayments of $500 every fortnight, over the year you’d actually pay back $13,000. 

That’s because while there are 12 months in the year, there are 26 fortnights and 52 weeks. By opting for the latter two, you could be shaving an extra month off your mortgage each year, without putting much of a strain on your budget.

And because interest on home loans is usually calculated daily, by increasing repayments you’re not only paying back the full amount of your home a lot faster, you’re also reducing the amount of interest you’ll accrue over the lifetime of the mortgage.

Of course, this assumes your lender calculates your fortnightly repayments by halving the amount you’d be paying monthly, and weekly repayments by dividing it by 4. Some, however, might use the “true” fortnightly amount, by multiplying your monthly repayments by 12 then dividing that amount by 26.

So how much could weekly or fortnightly payments save you?

To put things in real terms, let’s look at a $500,000 home loan with a variable interest rate of 3.00% over 30 years. Monthly repayments on this loan would be $2,108, and you can expect to pay around $758,887 over the lifetime of the loan.

Switching over to fortnightly payments of $1,054 a fortnight would find you paying a total of $724,492, a saving of roughly $34,395 over 30 years. And you could save slightly more if you opt for weekly repayments.

MonthlyFortnightlyWeekly
Repayments$2,108.02$1,054.01$527.01
Total paid$758,887.26$724,491.62$724,282.82
Amount saved$0$34,395.64$34,604.44

How to switch your repayment frequency

The first thing you’ll want to do is get in contact with your lender and ask how your weekly or fortnightly repayments would be calculated.

If they take your total annual repayments and divide the number by 26 (fortnightly) or 52 (weekly), then there won’t be much point changing, unless doing so would help you budget better.

If, however, your lender arrives at your fortnightly repayments by halving what you’re currently paying on a monthly basis and charging that every two weeks, it might be worth making the switch. Just make sure to ask if any penalties will apply.

Home loan comparisons on Mozo - last updated 11 August 2022

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • Variable Home Loan 70

    interest rate
    comparison rate
    Initial monthly repayment
    3.10% p.a. variable
    3.12% p.a.

    Affordable home loan rate for buyers or refinancers.. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 30% deposit required.

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  • Unloan Variable

    Owner Occupier, Refinance Only

    interest rate
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    Initial monthly repayment
    3.14% p.a. variable
    3.06% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

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  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

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  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.79% p.a. variable
    3.79% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required.

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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