For borrowers trying to save money on their home loan, it might be worth looking at the frequency of your repayments.
A small change from monthly to weekly might not make much of a difference to your household budget, but it could go a long way to cutting down your interest over the life of the loan.
The most important thing to know about home loans is that interest is calculated on the daily balance and charged to the loan account monthly in arrears.
If you take the minimum monthly repayment and pay half every two weeks, borrowers can save a significant amount off both the term and interest.
There are 26 fortnights in a year – the equivalent of 13 monthly repayments rather than 12, meaning you’re actually paying more than the minimum.
If borrowers choose to pay weekly, they could save more on interest but not so much on the term.
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