What is the Best Mortgage Repayment Frequency? Weekly, Fortnightly, or Monthly?
For several decades, the mortgage was a traditional financial product that helped individuals become homeowners. To keep it simple, payments were due on the first of every month. Today, homebuyers can pick among weekly, fortnightly, and monthly repayments. Each option offers a set of benefits. The best mortgage repayment frequency depends on your comfort level and financial acumen.
Most Australians stick with the monthly repayments because it offers the best comfort level. Your other bills are due once a month, so it makes sense to keep the mortgage repayment monthly too. Some Australians receive their salary payment once a month, so when you pay your bills, you take care of them at the same time.
If you’re interested in paying less toward interest, the weekly and fortnightly repayments options become interesting. The more frequent payments you send toward your mortgage, the faster you cut down the outstanding principal amount. Instead of amortising your interest payment by 360 payments over 30 years, you can amortise them twice as fast by opting for a fortnightly repayment. If you opt for the weekly repayment, you cut the principal amount down every week.
Best Mortgage Repayment Frequency Conclusion
The best mortgage repayment frequency depends on two factors, your comfort level and saving money. Frequent payments pay down the principal amount faster, so less of your repayment goes toward the interest rate charges. If you’re comfortable with weekly repayments, it’s a good choice for you. Otherwise, the monthly repayments get the job done too. To see the three repayments in action, try our online mortgage repayment calculator.