What are the benefits (if any) of paying your mortgage repayments weekly over monthly?

Hi Bill,

Great question. If paying fortnightly or weekly was the only thing you did with your home loan you can take 5-6 years off your home loan. (Loan amount and rate obviously has an impact here)

The reason being is that there are twelve months in the year but there are thirteen four week cycles. When you pay fortnightly or weekly you in effect are paying 13 months off a year on your home loan

The difference from fortnightly to monthly is not as significant due to the same number of fortnights to weeks.

Another reason why paying weekly may work better for you is that you are paid weekly this simply helps your cashflow having your loan repayments in cycle with your pay.

Hope this helps you!
Nicole :)

Bill. Hi. A good question that is very often answered incorrectly.
Paying Fortnightly versus Monthly will only have a small impact. Do not get me wrong, the quicker you get your dollars into the home loan the better off you are.
The trick in suggesting paying Fortnightly saves years off the loan is in that you pay "half" the monthly amount every fortnight. As said by another respondent, effectively paying thirteen monthly payments every year.
So is the secret, actually in paying Fortnightly. ? No it isn't ! The real secret is to simply pay "extra", either Fortnightly or monthly.
I recommend you leave the weekly, Fortnightly, monthly selection to tie in best with you personal salary / cash flow cycle.
Please give me a call if you would like a professional health check on your existing loan
Regards
Ken
Customers First Mortgages & Insurance
1300 ASK KEN

Offset account. .. put any spare cash in an offset account this has the effect of paying daily since that how most banks calulate interest. Until recently and I am talking about in the last 10 years before computers. Most lenders calculated intrrest based on when and how may payments where being made. For this reason paying weekly or fornightly made a huge difference. With modern computers which are able to calculate interest based on daily balances the difference is now less pronounced. And as interest is calulated daily the best option is to utilise and offset account which also has its interest calculated daily.
Hope this helps

Hi Bill,
There can be significant benefits in paying your home loan weekly and this usually suits people who are paid weekly.
As others have said, this allows you to make approximately 13 monthly payments per year thereby reducing interest and the term of your loan.
A well considered budget and suitable home loan features such as redraw and offset will help to manage your cash flow in the medium term.

Good luck

if you divide your monthly payments by 4 and pay that amount weekly, you will pay an extra month payment over the year. if you do not redraw any of this extra, a 30yr loan will reduce to about 24 years. if you could afford double payments the loan would drop to 8 years. only way to pay loan faster is extra payments.