Did you know that changing how often you make your home loan repayments could save you thousands? Switching from monthly to fortnightly repayments is a simple change that can lead to paying off your home loan faster and saving thousands in interest.

Why Fortnightly Payments Work

Many people pay monthly on their home loan – they make 12 monthly payments each year. By switching to fortnightly payments, you make 26 smaller payments a year. This is like making one extra monthly payment annually, which helps you pay off your loan faster and reduces the interest you pay.

A Quick Example

Let’s say you have a $500,000 home loan at 6% interest over 30 years:

• Monthly Payments: You’d pay $2,998 a month, with a total interest cost of $579,190.
• Fortnightly Payments: You’d pay $1,499 every two weeks, reducing your total interest to $498,564.

That’s a potential saving of around $80,626 in interest!

How Does It Save You Money?

Interest on home loans is usually calculated daily. By making repayments more often, you reduce your loan balance faster, meaning less interest accumulates over time.

Should You Make the Switch?

If you want to save on your home loan and pay off your mortgage sooner, switching to fortnightly repayments is something to definitely consider and easy to do.

The Bottom Line

If you want to pay your home loan down faster, switching to fortnightly repayments is an easy way to do so. It can save you thousands of dollars and help you own your property sooner. If you'd like to explore your options further, get in touch with us today! We're here to help you make the best choices for your financial future.