Compare monthly and fortnightly home loan repayments, and see how paying half the monthly amount every fortnight can shorten the loan and cut interest.
What this tool estimates
There are two ways to "pay fortnightly", and only one of them does anything useful. The first simply divides your annual repayment into 26 instalments — the same total each year, just smaller, more frequent payments. The second, the one worth knowing about, is paying exactly half your monthly repayment every fortnight. Because there are 26 fortnights in a year but only 12 months, you quietly make the equivalent of 13 monthly repayments instead of 12. The calculator above shows both, alongside the interest you could save and how much sooner the loan could be paid off.
What actually drives the saving
The extra month each year is the whole mechanism. On a typical loan it can take years off the term and tens of thousands off the total interest, without you feeling a large change in any single payment. Two things govern whether it works in practice. First, your lender has to apply the extra to the principal rather than holding it in advance — some do the latter, which saves you nothing. Second, the loan has to allow extra repayments without penalty. That is a policy question, and policy differs from one lender to the next.
Use it as a starting point
Treat the result as a structural option, not a verdict. The faster payoff is real, but whether it suits you depends on your offset balance, your rate, and what else that cash could be doing. Book a strategy session and we will check how your lender treats fortnightly payments and whether this is the right lever to pull.
General information only — not personal financial product or credit advice. The estimate is indicative and depends on each lender's policy, current rates and your full circumstances. AeFin is an Australian Credit Representative (CR 464548) of Finsure (ACL 384704).