In general, yes: paying off your mortgage weekly is a better strategy because it reduces the total interest you pay and helps you pay down your loan faster. The actual savings depend on your loan structure, lender, and personal circumstances.
In this article, we’ll compare repayment frequencies, show potential savings, and share practical tips for choosing the right plan for your situation.
How Paying Your Mortgage Weekly Can Save You Money
Paying your mortgage weekly helps reduce your principal faster due to how compound interest works. For example, if you have a $600,000 loan with an interest rate of 6% p.a., a standard monthly repayment would be $3,597.
Splitting this into weekly payments of around $899 means you’re reducing your principal more frequently. After two years, the monthly balance would be roughly $584,800, but with weekly payments it drops slightly faster to about $577,100, as interest accrues on a smaller balance more often. Over time, this small difference compounds – saving you money and shortening your loan term.
Weekly vs Fortnightly vs Monthly Mortgage Repayments
(Loan: $1,000,000 | Rate: 6.5% p.a. | Term: 30 years)
| Monthly | Fortnightly (accelerated) | Weekly (accelerated) | |
| Repayment amount | $6,320.68 | $3,160.34 | $1,580.17 |
| Interest payable (to pay off) | $1,275,445 | $981,706 | $980,469 |
| Total loan cost | $2,275,445 | $1,981,706 | $1,980,469 |
| Time to repay | 30 years | ~24 years 2 months | ~24 years 1 month |
| Time saved | n/a | ~5 years 10 months | ~5 years 11 months |
| Interest saved vs monthly | n/a | ~$293,739 | ~$294,976 |
How Much Can You Save Paying Weekly vs Monthly?
The exact savings depend on your loan size, interest rate, and compounding frequency. It’s also important to note that paying off weekly will mean you’ll finish paying off your loan sooner, allowing you to save on interest payments.
For example, a $600,000 loan at 6% p.a., paid weekly, could be paid off 5 years and 6 months earlier, saving around $149,282 in interest.
To see the results for yourself, check out our extra repayment calculator.
Pros and Cons of Weekly, Fortnightly, and Monthly Mortgage Payments
Paying off your mortgage with weekly, fortnightly or monthly payments each has its own pros and cons that may be relevant to your circumstances. Let’s look at the advantages and disadvantages of each:
Weekly Payment Pros:
- The principal loan amount is reduced with the most frequency, meaning that interest accrues on a smaller balance each week.
- You can shorten the loan term significantly over time.
Weekly Payment Cons:
- Harder to manage if your income isn’t weekly.
- Requires closer tracking unless payments are automated.
Fortnightly Payment Pros:
- Reduces interest faster than monthly payments.
- Results in 26 payments per year — effectively one extra month’s worth of repayments annually, saving time and interest.
Fortnightly Payment Cons:
- May not align with weekly or monthly pay cycles.
- You will likely need to track your load admin more closely if your payments aren’t automated
Monthly Payment Pros:
- Easiest to budget for and requires less admin.
- Aligns with most people’s salary schedules.
Monthly Payment Cons:
- Interest accrues on the full balance for a month before being reduced.
- Principal reduction is slower, and you’ll pay slightly more interest over the life of your loan.
Factors to Consider When Choosing a Repayment Schedule
When selecting your repayment frequency, consider your pay cycle, loan type, and lender flexibility. If these are out of alignment, your loan may not suit your circumstances. For example, if your income schedule changes from monthly to fortnightly, you should ideally be with a lender who can accommodate this change and adjust your repayment schedule accordingly.
In general, it’s easier and more beneficial to have your repayment schedule match your pay cycle for ease of budgeting. At AFMS, our brokers can help structure your repayments with lenders to ensure the best financial outcomes for you and your loan.
How to Set Up Weekly or Fortnightly Mortgage Payments
Setting up weekly or fortnightly repayments is usually simple: adjust them via online banking. Or ask your lender or broker to help.
If you wish to set up weekly repayments or need some help approaching lenders about changing your repayment schedule, AFMS can help you. We can advocate on your behalf and liaise with lenders, so you can get a better deal for you and your family.
Whatever option you decide, always make sure that your lender has no additional fees for changing your repayment frequency.
Common Myths About Weekly Mortgage Payments
Like with many aspects of home loans and finance, there are some common misconceptions surrounding weekly mortgage repayments.
- Myth: Lenders don’t allow weekly repayments
- Fact: Most lenders do allow weekly repayments, and even offer the option to change your repayment schedule
- Myth: Weekly repayments save lots of money, even exceeding lump sum repayments
- Fact: Extra lump sum repayments can have an immediate effect and reduce interest at a faster rate than going from monthly to weekly repayments. For example, a $10,000 lump sum on top of a monthly repayment schedule for a $600,00 mortgage will save you $1400 after a year, compared with a saving of $400 via weekly repayments alone
- Myth: You must receive your income weekly to benefit from weekly mortgage repayments
- Fact: Most lenders will allow you to make automated weekly repayments, regardless of your own income schedule
Other Ways to Save on Your Mortgage
dWeekly repayments are effective, but combining them with other strategies can help you pay off your loan even sooner. Making lump sum payments, using an offset account, or refinancing to a lower rate can accelerate your repayments. You’ll pay off your loan even sooner when combining these methods.
If you’re a first-home buyer, we’d encourage you to check out our First Home Buyers Guide for more savings tips, and check out our extra repayment calculator to see how much you could save over the life of your loan. Whatever path you decide to take on your home loan journey, AFMS can guide you with expert advice and tailored solutions to hit your financial goals.
FAQs
How does paying your mortgage fortnightly save money?
Paying your mortgage off fortnightly can net you greater savings than monthly repayments. Fortnightly payments reduce your principal loan amount sooner, which in turn reduces the amount of interest you pay over the life of your loan.
Why is it better to pay a mortgage weekly than monthly?
Having weekly home loan repayments instead of monthly helps you pay off more of your principal sooner. Though the amount you’ll pay weekly may match or exceed the monthly equivalent, the greater frequency of repayments drives down your principal amount and the interest you pay. With consistent repayments, you can finish paying your mortgage years earlier.
How much faster do you pay off a mortgage with weekly payments?
On average, paying off a $600,000 mortgage with weekly repayments will pay off your loan 5 years and 6 months sooner compared to a monthly repayment schedule
What’s the smartest way to pay off your mortgage faster?
The smartest way to pay off your mortgage faster is the one you can sustain. Ideally, a combination of weekly repayments with refinancing to a better interest rate, offset accounts and lump sum payments can give you the best results to pay off your entire mortgage sooner.
