Many homeowners stick to monthly repayments for their mortgage, often out of habit or convenience. But what if a small change in the way you pay could help you save thousands of dollars and shorten your loan term?
Switching from monthly payments to fortnightly repayments can make a significant difference in your mortgage. Here’s why:
How It Works: Fortnightly vs. Monthly Payments
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Monthly payments: Most borrowers pay their mortgage once a month, meaning you make 12 payments a year.
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Fortnightly payments: By switching to fortnightly repayments, you make a payment every two weeks, resulting in 26 payments a year — the equivalent of 13 monthly payments.
That extra payment may seem small at first, but it goes straight toward reducing your mortgage principal, which helps you pay off your loan faster.
The Impact on Your Mortgage
Making 26 payments instead of 12 may sound like it would increase your costs, but in reality, it can help you save money in the long run. Here’s how:
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Each fortnightly payment reduces your loan balance slightly more frequently, which in turn reduces the interest you pay over time.
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This extra payment each year helps you pay off your loan faster, which means you’re building equity in your home more quickly.
For example, on a $600,000 mortgage over 30 years with an interest rate of 6%, switching to fortnightly repayments could save you over $50,000 in interest and potentially cut 4–5 years off your loan term. That’s a substantial amount of money, especially over the long term.
Is It Right for You?
Switching to fortnightly repayments doesn’t require any extra effort from you, other than adjusting the frequency of your payments. If you’re looking for an easy way to pay off your mortgage faster, this is one of the simplest strategies.
It’s important to note that switching to fortnightly payments won’t affect your monthly budget. You’re simply redistributing your monthly payment into smaller, more frequent chunks.
How to Get Started
If you’re interested in setting up fortnightly repayments, we can help you determine the savings potential based on your unique loan details. You can also contact your lender to arrange the switch.
By paying off your loan faster and reducing the total interest you pay, you’ll achieve greater financial freedom — and save money along the way.
Want to Explore Your Options?
At SW Global Finance, we specialize in helping homeowners review and optimize their mortgage strategy. If you haven’t reviewed your loan in over two years, you may be missing out on savings opportunities. Let us help you determine whether fortnightly payments, or another strategy, is right for you.
Call/WhatsApp: +84 96 275 92 07
Email: support@sw-globalfinance.com.au
Let’s make sure your mortgage works for you, not against you.