What Is the Best Mortgage Repayment Frequency? Weekly? Fortnightly? Monthly?
The most common mortgage repayment frequency remains monthly. Most mortgages have a due date of the first every month. It makes the process easier for lenders and borrowers. However, homeowners can also opt for weekly and fortnightly repayments. Then, the lender establishes the due dates in your loan contract.
Most Australians prefer to pay their mortgage monthly. They take care of their bills at the same time. Thus, they ensure that their finances remain in good health too.
Other homeowners want to pay off their mortgage quickly. Therefore, they send extra repayments. Plus, they want to save on the home loan interest rate charges. The quicker a homeowner chips away at the principal, the less they will pay in interest. Let’s look at an example.
A $500,000 mortgage with a 3% interest rate and 30-year term nets a monthly repayment of $2,100. If you opt for a fortnightly repayment, every two weeks you send $972. The fortnightly option requires 25 or 26 repayments annually.
Homebuyers who opt for the weekly option for the same mortgage incur a repayment of $486. Those who aim to pay the least amount of charges benefit from the weekly or fortnightly frequency. Homeowners who feel good about their loan terms can keep the monthly repayment option.
Our Mortgage House loan specialists can provide more insight.
Mortgage Repayment Frequency Conclusion
The best mortgage repayment frequency for each homeowner depends on what they want to accomplish. Loan specialists at Mortgage House can explore your options based on your financial circumstances. Contact our team today.