I talk to so many clients about their repayments and almost every time my clients request to repay their loan repayments either weekly and fortnightly because we all know that saves time and money off the loan right… well not always….
These days banks and lenders will gladly offer you a fortnightly or weekly repayment, and most will set it up for you however, the way the bank and lender work out your repayment means you pay the ‘True Weekly’ or ‘True Fortnightly’ repayment, thus saving you nothing!
What is True weekly/fortnightly?
If you have a monthly mortgage repayment of $2000 and you ask your lender to to pay fortnightly, the majority of lenders will calculate your repayments as follows;
$2000 X 12 months (equals an annual repayment of $24 000.00 / 26 fortnights = $923.07 a fortnight. This is what they will set your repayments to.
How can I save money?
The idea of paying weekly or fortnightly is because during the year we have more weeks/fortnights in some months, this means over a full year you will repay one month extra repayment which saves you time and money.
For example, $2000 / 2 (for fortnightly) = $1000. If you repay $1000 a fortnight for 26 fortnights you will have repaid $26 000.00 which is one full repayment in front.
Now imagine if you can repay an extra month repayment every year for the life of your 30 year loan! The key here is to know the difference and know what you are repaying.
I have met clients in the past that through they were saving thousands by paying weekly only to find their bank had set up true weekly repayments.
If you want help to work out what your repayments are, or want to see if I can save you more money on your loan, you can contact me here; https://360mortgagesolutions.com.au/contact-us/ Or you can book directly into my Calendar here; https://calendly.com/360mortgagesolutions/facetoface