Home News ​A Small Change Can Create a Big Difference

​A Small Change Can Create a Big Difference

Font size :
Paying off a mortgage as quickly as possible is a goal for many Australians and making the switch to fortnightly repayments can save you money in interest repayments as well as reducing the term of your mortgage.
 
Although it may not seem like much of a difference between monthly and fortnightly mortgage repayments, the difference is very much noticeable over time. With many mortgages having terms of 25 or 30 years, extra repayments over the years do add up. By switching from monthly to fortnightly repayments, you are actually making additional repayments on your mortgage. The reason for this may not be obvious at first but it comes down to simple mathematics. We all know that there are 12 months in a year and 52 weeks in a year but the idea that there are 4 weeks in a month is not quite correct. If there were 4 weeks in a month, a year would be 48 weeks instead of 52 weeks and this is the reason why fortnightly repayments will pay off your mortgage faster.
 
If your mortgage is $3000 each month, over the year your repayments would add up to $36,000 ($3000 x 12 months). If you halve your monthly repayment, i.e. $1500 per fortnight, your repayments over the year would add up to $39,000 ($1500 x 26 fortnights). This means that you are paying an additional $3,000 each year, reducing the total mortgage and thus reducing the interest payable on the total. By paying fortnightly, you are effectively making 13 ‘monthly repayments’ over the year and you may not even notice the impact on your lifestyle week to week.
 
It is easy to alter your repayment frequency and pay off your loan faster, simply speak to your mortgage broker or lender to make the switch.

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Jeremy Fisher

Director and Founder of 1st Street Home Loans, Jeremy Fisher, is one of the most awarded mortgage brokers in the industry and winner of the Australian Broker Association's prestigious 'Australian Broker of the Year'. Since 2001, Jeremy has settled in excess of $500 million worth of property loans and delighted clients with exceptional results and highly personalised service. 1st Street Home Loans specialises in Home Loans, Commercial Loans, Leasing and Financial Planning. 

1st Street Home Loans is a leader in the industry – awarded No. 1 Mortgage Broker in Australia and ranked No. 1 Elite Business Writer in Australia. We have the knowledge and the relationships to get you the best rate on the market, guaranteed, without charging you any fees. You can be approved for a loan within 48 hours and 1st Street will take care of all of the paperwork and communications with lenders, real estate agents and solicitors.
 

Mortgage News and Articles

House prices return to more affordable levels in mining towns House prices return to more affordable levels in mining towns

While the end of the mining boom has had a negative impact on property prices, homes in the region have become more affordable Read more

Borrowers should anticipate a possible rate hike Borrowers should anticipate a possible rate hike Some experts advise borrowers to look for a fixed loan that allows extra repayments so that they can whittle down the balance sooner ... Read more

Why choosing the right mortgage is hard for first-home buyers Why choosing the right mortgage is hard for first-home buyers Many feel overwhelmed by the sheer range of products and interest rates on offer, a new survey reveals ... Read more

Mortgage applications drop in second quarter Mortgage applications drop in second quarter This marks the “beginning” of a downward trend, says Equifax executive ... Read more

More mortgage news and articles

Sponsored Links

Wednesday, Jul 26, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords