How often can I make repayments on my home loan?
There are several options you can usually choose from when looking at the frequency of your home loan repayments. While it's typical for lenders to show you what the monthly repayment will be on the amount you want to borrow, you don’t necessarily need to pay monthly.
Some lenders allow you to pay weekly or fortnightly. Others may even permit you to make repayments less frequently, perhaps quarterly or annually.
You would need to check with your lender to see what (if any) fees, terms, and conditions apply if you’re considering changing the repayment frequency on your loan. If you’re not satisfied with your current lender, you might also consider refinancing your home loan to one with a lower interest and comparison rate, better terms, conditions, and features, or one that allows you to choose a repayment frequency that suits you.
Is it better to pay your mortgage weekly, fortnightly, or monthly?
Both weekly and fortnightly repayments can potentially save you money compared to monthly repayments. One reason behind this is the way interest normally accrues on a home loan.
The interest on your outstanding balance is generally calculated daily, then added up over the period of your repayment. If that period is monthly, it adds up to about 31 days of interest, depending on the month.
If you increase the frequency of your repayments to fortnightly or weekly, you chip away at your outstanding amount quicker, meaning the amount your charged interest on decreases more regularly. This could save you a decent chunk of money over the life of your loan.
But the more effective reason this can work is to increase how many repayments you make in a year.
Many lenders calculate weekly or fortnightly repayments by taking the monthly repayment and splitting it into two or four. But because there are more than four weeks in most months, making half or a quarter of your monthly repayment 26 or 52 times a year means you end up making an extra month’s worth of repayments.
This will cost you more in the short term, but increasing your repayment amount is one way to pay off your loan more quickly, saving a good deal in interest charges over its lifetime.
If your lender doesn’t simply split the monthly repayment, you could instead switch to fortnightly repayments and pay half your monthly repayment each time.
How much can you save by paying a mortgage weekly vs monthly?
To find out how much you could potentially save, Canstar Research crunched the numbers on a 30-year mortgage of $600,000, at an interest rate of 6.62%.
When paid back monthly over the full term of the loan, the total interest paid in this hypothetical scenario would be $782,358 – significantly more than the loan itself.
By contrast, broken down into weekly repayments, the loan could be paid off six years and four months ahead of time, with a total of $589,435 interest paid – a saving of $192,923.
Monthly | Fortnightly | Weekly | |
|---|---|---|---|
Repayments per year | $3,840 | $1,920 | $960 |
Total paid per year | $46,080 | $49,920 | $49,920 |
Extra paid per year | - | $3,840 | $3,840 |
Total interest payable | $782,358 | $591,266 | $589,435 |
Interest saved | - | $191,092 | $192,923 |
Time saved | - | 6 years and 4 months | 6 years and 4 months |
Source: www.canstar.com.au - 24/08/2026. Average interest rate of 6.62% based on owner occupier variable loans on Canstar’s database available for a loan amount of $600,000, 80% LVR and principal & interest repayments; excluding introductory and first home buyer only loans. Calculations assume a $600k loan over a 30 year term. Fortnightly and weekly repayments calculated as half and a quarter of monthly repayments.
It could be worth paying more than the minimum requirements on your home loan, if you can afford to and after checking with your lender you won’t be charged extra for this. The more you pay, the faster you can expect to pay off your loan and the less you pay in interest overall.
How else can you save on home loan interest?
Bumping up your repayment frequency is not the only way to save on interest. Another way to reduce your interest charges is to use what’s known as a home loan offset account.
This is a special type of bank account that’s attached to your home loan. If you put money in your offset account, you won’t earn interest on it like you would with a savings account. Instead you offset the amount of interest payable on your outstanding home loan balance.
As an example, say you have a $600,000 home loan with $50,000 in your attached offset account. You’d only pay interest on $550,000 of the outstanding balance, rather than the full $600,000.
If your cash flow allows you to put money away in an offset account, it can be a useful way to lower your mortgage repayments.
How can I set up more frequent payments?
If you want to increase the frequency or the size of your home loan repayments, talk to your lender about the available options. Be sure to ask whether any additional fees apply if you choose to make larger repayments or more frequent ones.
If you’re happy to make the switch, you could consider setting up a direct debit from your savings or transaction account to make sure you meet your repayment each week, fortnight, or month.
Your own personal circumstances may make one option more suitable than others. For example, if you get paid weekly, you may decide it makes sense to make weekly home loan repayments.
As with any financial decision, it’s important to understand all your options and consider seeking professional advice if you need it.
Are there other benefits to making extra repayments?
Making extra repayments can also be useful as some lenders may allow you to take a ‘repayment holiday’ if you get ahead of your required repayments. This means you won’t need to make any repayments for an agreed period of time.
If you’re a seasonal worker or have a shifting cash flow, this may allow you to pile a lot of your spare cash into your loan when your income is flowing in, and take a short breather during other periods. You may also be able to redraw extra repayments you’ve made over time if you need access to the funds. Again, you’d need to check with your lender to see if there would be any fees or restrictions that apply when doing so.
While you’re talking to your lender, why not ask for a lower interest rate, too? Chances are you’re switching repayment frequency because you want to save some money, so there’s no time like the present to try to negotiate a better rate as well.
