Can You Estimate Fortnightly Repayments by Dividing by 2? What are the Benefits?
Traditional mortgage repayments occur once a month. To make things easy for homeowners and lenders, lenders collect the repayment on the first of the month. Most homeowners accept the frequency as standard. However, some homeowners decide to send extra payments or to establish more frequent repayments such as weekly and fortnightly.
Homebuyers who pick fortnightly repayments will send a payment to their lender 25 to 26 times annually. This frequency helps homeowners chip away at their mortgages faster. They lower the total amount that they incur in interest rate charges.
If you obtain a $500,000 mortgage with a 3% interest rate and a 30-year term, it nets a monthly repayment of $2,100. If you opt for the fortnightly frequency, it nets a repayment of $973 once every two weeks according to our Mortgage House online calculator.
You can also calculate the fortnightly repayments through simple math. However, it nets an estimate, not an exact amount. For example, dividing $2,100 by two renders $1,050. In a pinch, simple math works. Plus, you can work with estimates while you prepare your finances before applying for a home loan.
If you can see your financial circumstances through the eyes of the lender, it helps you understand the mortgages available to you. Our loan specialists can help you obtain more precise mortgage information.
Calculating Fortnightly Repayments Conclusion
To make calculating fortnightly repayments easier, we recommend using our Mortgage House home loan calculator. Next, we encourage homebuyers to speak with our loan specialists. Contact our team today.