Question 1

How much are repayments on a $500K mortgage?

Accepted Answer

At a 6.5% interest rate over 30 years, monthly repayments on a $500,000 mortgage are approximately $3,160. Fortnightly repayments would be around $1,457 and weekly repayments around $729. Paying fortnightly or weekly instead of monthly can save thousands in interest over the life of the loan because you effectively make extra repayments each year.

Question 2

Should I pay my mortgage fortnightly or monthly?

Accepted Answer

Paying fortnightly is generally better than monthly. With monthly repayments you make 12 payments per year, but with fortnightly repayments you make 26 half-payments — equivalent to 13 monthly payments per year. That extra payment goes directly to reducing your principal, which can shave years off your loan and save tens of thousands in interest. For a $500,000 loan at 6.5% over 30 years, switching from monthly to fortnightly repayments can save over $60,000 in interest and reduce the loan term by approximately 4 years.

Question 3

How much do extra repayments save on a mortgage?

Accepted Answer

Extra repayments can dramatically reduce the total interest paid and shorten your loan term. For example, paying an extra $200 per month on a $500,000 loan at 6.5% over 30 years could save you over $100,000 in interest and cut approximately 5 years off your loan. Even small additional amounts — such as $50 per week — add up to significant savings over the life of a mortgage. Most variable rate loans in Australia allow unlimited extra repayments without penalty.

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