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Home loan repayments: is monthly, fortnightly, or weekly best?

Woman deciding her home loan repayment frequency.

How often you make home loan repayments can affect how much interest you pay overall. The three frequency options you have are to pay monthly, fortnightly, or weekly.

Many borrowers choose to line up mortgage repayments with their monthly pay check, which is a relatively smart idea. After all, now you can budget with what you have.

However, switching to a fortnightly or weekly repayment could save you crucial interest, though this will depend on the lender. 

So how does loan payment frequency affect your long-term mortgage costs? Let's break it down.

How mortgage repayment frequency affects your home loan costs

Couple debating the pros and cons of weekly vs. monthly mortgage repayments on home loan costs.

Switching from monthly repayments to weekly or fortnightly repayments affects:

  • How quickly you pay off your home loan.
  • How much interest you pay overtime.
  • The size of your repayments.

Why? Simply because there are more fortnights (26) and weeks (52) in the year than months (12). By paying smaller amounts more often, you end up paying off more of your principal. And less principal means less interest charged overall. 

Confused? Let's lay it all out.

Home loan payment frequency example

Your monthly mortgage repayments cost $1,000. In one year, you pay $12,000.

However, if you switch to paying $500 every fortnight (two weeks), in one year you'd repay $13,000.

So by opting to pay half as much twice as often, you shave an extra month off your repayment timeline. If you keep doing this throughout your loan term, you could actually pay your home loan off faster.

Mortgage interest is calculated on your remaining principal amount daily, so by including fewer days in your mortgage repayment (14 vs. 30), you pay less interest on individual transactions. You also pay less interest overall because you're paying off more of the home loan principal.

Cons of increasing home loan repayment frequency

Of course, this all assumes your lender calculates fortnightly repayments by halving the amount you’d pay 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. This could in fact slow you down and have you pay more interest overtime. 

When comparing home loan lenders, check how they calculate your repayments to see if you could actually save by increasing your payment frequency.

How much weekly or fortnightly mortgage repayments save

Piggy banks showing different home loan repayment frequencies.

To put things in real terms, let’s look at a $500,000 home loan with a variable interest rate of 6.00% over 25 years. Monthly repayments on this loan would be $3,222, and you can expect to pay around $466,452 in interest over the lifetime of the loan.

Switching over to fortnightly payments would save roughly $6,616 in interest over 25 years. And you could save slightly more if you opt for weekly repayments.

Monthly Fortnightly Weekly
Repayments $3,222 $1,486 $743
Total interest paid $466,452 $459,836 $458,885
Amount saved $0 $6,616 $7,567

For more tricks, head to our interest saving guide. You can also crunch your home loan costs using our handy calculators below.

How to switch home loan repayment frequency

Woman switches home loan repayment frequency to save money.

Switching your repayment frequency is usually a matter of contacting your lender, or if you can manage your home loan online or in-app, changing it yourself. 

However, before you get started, you'll want to check how your lender calculates mortgage repayments.

To do this, contact your lender and ask how they charge weekly or fortnightly repayments.

  • BAD: If they take your annual repayments and divide the number by 26 (fortnightly) or 52 (weekly), then there won't be much point in changing – unless doing so helps you budget better.
  • GOOD: If they divide your monthly repayments by 2 (fortnightly) or 4 (weekly) and charge appropriately, then you could potentially save!

Also ask if any penalties or fees apply for paying weekly or fortnightly. Fees can add up quickly.

Compare home loans - last updated 27 May 2024

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Evlin DuBose
Evlin DuBose
RG146
Senior Money Writer

Evlin, RG146 Generic Knowledge certified and a UTS Communications graduate, is a leading voice in finance news. As Mozo's go-to writer for RBA and interest rates, her work regularly features in Google's Top Stories and major publications like News.com.au.

Niko Iliakis
Niko Iliakis
Money writer

Niko has three years experience as a finance journalist. He specialises in home loans, business loans and interest rate movements at Mozo.

* 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. You can change the loan amount and term in the input boxes at the top of this table. 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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