26 Nov 2021

What Is the Best Mortgage Repayment Frequency? Weekly, Fortnightly, or Monthly?

Most homeowners who finance their home purchase with a mortgage opt for monthly repayments. Lenders set up the payments automatically from a checking account for the first of the month. The consistency allows the homeowner to organise their finances around the due date. Plus, it’s easy to remember.

It’s possible to change the mortgage repayment frequency. Those who do end up saving money after 30 years. 

Keep in mind that the best mortgage repayment frequency depends on the homeowner’s comfort level. It takes some planning to send in a weekly or fortnightly repayment. However, the benefits are worth it. To start calculating more frequent repayments remember that a year has 52 weeks. If you opt for fortnightly payments, you make 26 repayments instead of 12. 

If a homeowner borrows $500,000 over 30 years at a 3% interest rate, the monthly repayment amount equals $2,108.02. If the homeowner opts for a fortnightly repayment, they pay $972.51 every two weeks. This gives a savings of $163.

Opting for a weekly repayment delivers a total of $486.17. This represents a savings of $163.34.

The difference between the weekly or fortnightly repayment in savings isn’t great. Thus, a homeowner benefits from either over the monthly option. 

A savings of $163 a month makes a difference in some households. Thus it’s worth exploring the alternatives. Check out our home loan calculator to try it for yourself.

Mortgage Repayment Frequency Conclusion

Homeowners and buyers who want to discuss increasing their mortgage repayment frequency can. Mortgage House loan specialists are ready to discuss your options. Call our team to make an appointment.

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