This simple switch could help you pay off your mortgage quicker

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Though most borrowers in Australia opt for monthly home loan repayments, making repayments fortnightly – and possibly even weekly – instead could provide greater savings in the long run.

“Where people will have the highest saving impact on their home loans is if they pay inflated fortnightly repayments,” says Mallia. “That is: paying exactly half of what the monthly repayments on that loan would be.”

How does that work, exactly? Of course, there are 12 months in a year, but that doesn’t mean there are 24If you halve your monthly repayments and pay every fortnight, you’re a whole month ahead on your loan each year. A welcome glitch, thanks to the Gregorian calendar.This means you would be paying the equivalent of 13 monthly repayments as opposed to the 12 you would with a monthly repayment frequency.

“I know it’s a delicate time, where people are struggling to make their mortgage repayments, and they’re perhaps looking at ways they can decrease what they pay rather than increase. So, a fortnightly repayment won’t be right for everyone.”

 

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