Paying Mortgage Weekly vs Monthly: Which Is Better?

How often can I make repayments on my home loan?

There are several options you can take to make repayments on your home loan. When looking for a home loan, most lenders will show you what the monthly repayment will be on the amount you want to borrow.

Some providers may offer you the option to make repayments fortnightly (every two weeks) or weekly, depending on the type of loan you’re after. Others may allow you to make repayments more or less frequently, such as quarterly or annually, but monthly, fortnightly and weekly are the most common options you’re likely to encounter.

You would need to check with your loan provider to see what (if any) fees, terms and conditions may apply if you are considering changing the repayment frequency on your loan, and if you are not satisfied with your current provider, you might consider refinancing your home loan to one that could save you money.

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, provided you’re allowed to make the change. One reason for this is the way interest normally accrues on a home loan.

The interest on the outstanding balance of a home loan is generally calculated daily, then added up over the period of your loan repayment. If that repayment period is monthly then that soon adds up to about 30 days of interest, depending on the number of days in the month and how your lender makes the calculation.

If you can increase the frequency of your repayments, to fortnightly or weekly, then you eat away at the outstanding amount of your loan much earlier. This can save you money in interest over the life of your loan.

But there is another simple trick that could potentially help you save far more money in interest charges – assuming your lender allows it: you could change from monthly to fortnightly repayments and pay half your monthly repayment each time.

Monthly repayments are generally paid every calendar month, and there are 12 calendar months in a year, spread over 52 weeks. But 52 weeks equates to 26 fortnights, which, for these purposes, is the same as 13 four-weekly payments.

That means you’re paying more money than you would if you just made 12 calendar monthly repayments per year. You are effectively paying the same as 13 calendar monthly repayments in a 12-month period.

This will be costlier 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 the lifetime of the loan.

You could also change to weekly repayments at a quarter of your monthly repayment plan. That again would give you 52 weekly repayments, again the equivalent of an extra calendar monthly repayment a year.

Let’s take a closer look at the numbers.

How much can you save by paying a mortgage weekly vs monthly?

To find out how much you could potentially save by increasing the frequency of your home loan repayments, Canstar crunched the numbers on a 30-year mortgage of $600,000, at an interest rate of 6.83%.

When paid back monthly over the full term of the loan, the total interest paid in this hypothetical scenario would be $812,478 – a significant amount more than the loan itself.

By contrast, broken down into fortnightly repayments, the loan could be paid off six years and six months ahead of time, with a total of $608,107 interest paid – a not inconsiderable saving of $204,371.

The below table illustrates how much could potentially be saved in interest charges by repaying this loan fortnightly or even weekly.

Savings From Increasing Home Loan Repayment Frequency ($600k, 6.83%, 30 Years)

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Source: www.canstar.com.au – 30/01/2025. Average interest rate of 6.83% 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 that you won’t be charged extra for this. The more you pay, the faster you pay off your loan and the less you pay in interest.

You can work out an estimate of how much you could save by making weekly vs monthly or fortnightly vs monthly repayments by using our Extra Repayments Calculator.

How else can you save on home loan interest?

Bumping up your repayment frequency is not the only way to save on home loan interest. Another way to reduce your interest is to use what’s known as a home loan offset account.

This is a special type of bank account that comes attached to a home loan, typically a variable rate one. If you put money in an offset account, you will not earn interest on it but, instead, you will offset the amount of interest payable on what you owe on your mortgage.

Say, hypothetically, that you have a $600,000 home loan with an offset account attached, and $100,000 in your home loan offset account. You will only pay interest on $500,000, rather than the full $600,000 balance of your mortgage.

If your cashflow 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 and amount of your home loan repayments this should be relatively easy to organise. You should talk to your lender to ask what options may be available to you.

Be sure to ask whether any additional fees apply if you choose to make repayments more frequently.

Depending on what your lender says, if you’re happy to make the switch, you could consider setting up a direct debit from your savings account or transaction account to pay your lender a certain amount each week, fortnight or month. Just make sure you’re covering at least the minimum repayment amount required by your lender.

Your own personal circumstances may make one option easier than the 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 consider all of your options based on your personal circumstances, and to consider seeking professional advice if you need it.

Are there other benefits to making extra repayments?

Making extra repayments can be useful because if you get ahead in your required repayments, some lenders may allow you to take a “repayment holiday”, when you don’t need to make any repayments for an agreed period of time.

For some borrowers, such as seasonal workers or those with a shifting cash flow, this strategy may allow you to pile a lot of your spare cash into your loan when your income is flowing in, and to take a short breather during periods of less income.

If you are interested in this option, you could ask your lender if it would allow you to take a repayment holiday if you are ahead on your home loan payments.

You can use tools like our Extra Repayments Calculator to help you work out how you could pay off your loan faster and save in interest by contributing different extra amounts to your loan repayments.

Depending on whether your particular home loan offers this, you may also be able to redraw on the extra repayments you’ve made over time, which could be useful if you need access to some money. Again, though, you’d need to check with your lender to see if there would be any fees for doing this.

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.

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