How often can you make repayments on home loans?
Most home loans have a monthly repayment scheduled by default. But most home loans also offer the option to make repayments weekly, fortnightly, or monthly. Still other providers allow borrowers to make repayments more or less frequently, with repayment frequency options such as daily, quarterly, semi-annually, or even annually.
Lowest advertised rates for variable home loans
If you’re in the market for a new home loan, the tables below display a snapshot of the lowest variable home loan products on Canstar’s database with links to lenders’ websites available for a loan amount of $350,000 at 80% LVR in NSW, and available for Principal and Interest repayments. The results are sorted by ‘current rate’ (lowest to highest), then by provider name (alphabetically).
Top interest rates for refinance home loans
Top home loan interest rates for first home buyers
Top interest rates for investment home loans
Weekly vs monthly mortgage repayments
Are weekly mortgage repayments better? Yes, both weekly mortgage repayments and fortnightly repayments are better than monthly repayments. In fact, since interest is calculated daily, the more frequent payments you make, the more you could save in interest over the life of your loan.
Some banks charge a fortnightly payment as “half your monthly repayment, charged every second week”, which means you could save money in interest because you would pay off your loan faster. By 26 fortnightly payments per year that are half your monthly repayment, you are paying more money than you would if you just made 12 monthly repayments per year. We’ve given a case study example below to show how this works.
Other banks charge a fortnightly payment as “your total annual repayments, divided by 26 fortnights”, which means you are still paying a little extra – but not as much. The savings in interest would be hundreds of dollars instead of thousands of dollars, and you wouldn’t repay your loan much faster than usual. Be sure to ask your bank how they apportion your regular repayments before making the switch. If your bank uses this method, you can still get ahead by making extra repayments whenever you can afford to.
John and Sarah are paying $1,934/month on a home loan of $350,000 at the current average standard variable interest rates on our database (4.44% p.a.), with the average ongoing fees on our database ($96/year).
If they switch to fortnightly payments and halve their repayment amount, they will end up paying off more on their loan by the end of the year, which means they will have paid less interest and actually saved money.
If they stay on a fortnightly schedule for their entire loan term (25 years in this example), they could save nearly $100,000 in interest payments.
|Required Repayments Per Year||$1,934 x 12||$967 x 26||$483.50 x 52|
|Total Paid Per Year||$23,208||$25,142||$25,142|
|Extra Paid Per Year||n/a||$1,934||$1,934|
|Total Interest Payable Over 25 Year Loan Term||$230,054||$195,624||$195,391|
|Interest Saved Over 25 Years||n/a||$34,430||$34,663|
|Time Saved By Repaying Loan Early||n/a||3 years||3 years|
Based on a home loan of $350,000 with a 25-year loan term, at the current average standard variable interest rate of 4.44% p.a.
The bottom line is to pay more than the minimum requirements on your mortgage, if you can afford to. The more you pay, the faster you pay off your loan and the less you pay in interest.
Work out how much you could save by making weekly vs monthly mortgage repayments using our Repayments Calculator. You can easily make calculations like this, along with calculating how other factors could change your repayments, such as your interest rate and loan term:
Is it easier to make weekly, fortnightly, or monthly repayments?
All of the available repayment frequency options are very easy to organise these days, thanks to the ability to set up a direct debit from your savings account or transaction account to pay your lender a certain amount each week, fortnight, or month, etc. So if you doubt you’d be able to remember to make a repayment every second week in the fortnightly system, don’t worry – just schedule the payment and let your bank take care of it automatically.
Of course, one option may be easier than the others in your particular case. For example, if you get paid weekly, you may decide that it makes sense to make weekly mortgage repayments. You can schedule your repayment to come out the day after you get paid to prevent accidentally overspending and ending up without enough money left to make a fortnightly or monthly repayment. Consider all of your different options when writing your budget.
How do you switch from monthly to weekly repayments?
First, check whether your bank offers the payment frequency that you desire (e.g. weekly, fortnightly, etc.). Our handy table below is a good starting point, but always confirm this with your lender before assuming you can switch!
Secondly, call your bank – or use the online banking portal if you manage your loan online – to apply to switch your repayment frequency. Ask them whether they calculate fortnightly payments as half of a monthly payment, paid fortnightly (which saves you interest), or as your total annual amount divided by 26 fortnights (no interest savings). Also be sure to ask them whether any additional fees apply if you choose to make repayments more frequently.
Thirdly, while you’ve got the bank on the phone, why not ask for a lower interest rate? Chances are you’re switching repayment frequency because you want to save money, so there’s no time like the present to negotiate a better rate as well.
Which lenders allow weekly, fortnightly, or monthly repayments?
The table below outlines what repayment frequency options you can expect from the various home loan lenders we research and rate. This information is provided to us by the financial institutions themselves and is correct at the time of writing:
|Provider||Repayment Frequency Options|
|Legend: W (weekly), F (fortnightly), M (monthly), Q (quarterly), S (semi-annually), A (annually|
|Adelaide Bank||W F M|
|AMO Group||W F M|
|AMP Bank||Some loans W F M, some loans M|
|ANZ||Some loans D W F M, some loans W F M|
|Arab Bank Australia||W F M
Except: Line of Credit home loan M Q S A
|Aussie||Some loans W F M, some loans F M|
|Australian Military Bank||W F M
Except: Home Equity Loan M
|Australian Unity||W F M|
|Auswide Bank||W F M|
|B&E Personal Banking||W F M|
|Bank Australia||Some loans W F M, some loans monthly only, some loans annually only|
|Bank of Melbourne||W F M|
|Bank of Sydney||W F M|
|BankSA||W F M|
|BankVic||Some loans W F M, some loans M|
|Bankwest||W F M|
|bcu||W F M|
|Bendigo Bank||Some loans D W F M Q S A, some loans W F M|
|Beyond Bank||Some loans D W F M, some loans W F M|
|BOQ||W F M|
|Catalyst Money||W F M|
|Citi||Some loans D W F M, some loans W F M, some loans M|
|Click Loans||Some loans W F M, some loans F M|
|Commonwealth Bank||Some loans D W F M Q S A, some loans W F M|
|Community First Credit Union||W F M|
|CUA||W F M
Except: Rate Breaker home loans M
|Defence Bank||W F M
Except: Essentials Smart Mover home loan M
|Delphi Bank||W F M Q S A
Except: Home Equity home loan M
|Easy Street Financial Services||W F M|
|ECU Australia||W F M|
|FCCS Credit Union||W F M|
|First Option Credit Union||W F M|
|Firstmac||W F M
Except: Construction home loans M
|Freedom Lend||W F M|
|G&C Mutual Bank||W F M|
|Gateway Credit Union||W F M
Except: Construction home loans M
|Heritage Bank||D W F M|
|Holiday Coast Credit Union||D W F M|
|Homeloans.com.au||W F M|
|Homestar Finance||Some loans W F M, some loans F M|
|Horizon Credit Union||W F M
Except: HandyLoan home loan M, Value Plus home loan D W F M
|HSBC||Some loans D W F M A, some loans W F M|
|Hume Bank||Some loans D W F M Q S A, some loans W F M|
|Hunter United||Some loans D W F M, some loans W F M|
|Illawarra Credit Union NSW||W F M|
|IMB||W F M|
|iMortgage||W F M|
|ING Direct||F M|
|Intech Credit Union||W F M
Except: Mortgage Master home loan M
|Liberty Financial||W F M|
|loans.com.au||W F M
Except: Construction home loans M
|Macquarie Bank||Some loans W F M, some loans F M|
|Macquarie Credit Union||W F M|
|ME||W F M|
|Mortgage House||W F M|
|MOVE – People Driven Banking||W F|
|My Credit Union||W F M|
|MyState||W F M
Except: Cash on Hand Line of Credit home loan D W F M S A
|NAB||Some loans W F M, some loans A|
|Newcastle Permanent||Some loans D W F M Q S A, some loans W F M|
|Northern Inland Credit Union||W F M|
|P&N Bank||W F M|
|Pacific Mortgage Group||W F M|
|People’s Choice Credit Union||W F M|
|Pepper Money||W F M|
|Police Bank||W F M
Except: Equity Maximiser Variable home loan M
|QBANK||W F M|
|QT Mutual Bank||W F M|
|Qudos Bank||W F M
Except: Home Access Loan home loan M
|Queenslanders Credit Union||W F M|
|RAMS||W F M|
|Reduce Home Loans||Some loans W F M, some loans F M|
|Regional Australia Bank||W F M|
|RESI Mortgage Corporation||W F M|
|SCU||W F M|
|Select Encompass Credit Union||W F M|
|SERVICE ONE Alliance Bank||W F M|
|Southern Cross Credit Union||W F M|
|St.George Bank||W F M|
|State Custodians||W F M|
|Summerland Credit Union||W F M|
|Suncorp Bank||W F M|
|Teachers Mutual Bank||Some loans W F M, some loans M|
|The Capricornian||W F M
Except: Mortgage Plus home loan D W F M
|The Mac||W F M|
|The Mutual||W F M|
|The Rock||W F M|
|Transport Mutual Credit Union||W F M|
|UBank||W F M|
|UniBank||Some loans W F M, some loans M|
|Victoria Teachers Mutual Bank||W F M|
|Virgin Money||W F M|
|Westpac||Some loans W F M, some loans M|
|Woolworths Employees Credit Union||D W F M|
|Yellow Brick Road||Some loans W F M, some loans F M, some loans M|
|Source: Canstar View, 11 January 2017.
This data has been provided to us by the financial institutions we research and rate.
For full terms and conditions, visit the provider’s website.
You can compare more than 1,100 home loans from all of these providers on our website:
What about if I make extra repayments?
Some borrowers may choose to make a regular fortnightly repayment and then add in “a little extra” once a month or whenever their budget allows it. Making extra repayments like this saves money in interest as well, because you would be paying off your loan faster.
At the time of writing, our Canstar database shows that the vast majority of home loans we research and rate allow borrowers to make additional repayments:
- Yes: 3,397 home loan products
- No: 254 home loan products
Making extra repayments can also be useful because if you get ahead in your required repayments, some loans allow the borrower to take a “repayment holiday”. For seasonal workers or those with a shifting cashflow, this strategy may allow the borrower to pile a lot of their spare cash into their loan when their income is flowing in, and to take a short breather during periods of less income.
At the time of writing, a significant number of lenders allow borrowers to take a repayment holiday if they are ahead on their payments:
- Yes: 1,711 home loan products
- No: 1,276 home loan products
You can use our Extra Repayments Calculator to work out how you could pay off your loan faster and save in interest by contributing different extra amounts to your loan each month: