Weekly vs Fortnightly vs Monthly Repayments: The 13th Payment Effect
ADS Team
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July 22, 2026
2 months ago
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In short: Paying half your monthly repayment every fortnight means 26 payments a year instead of 12 — the equivalent of 13 monthly payments, not 12. On a $750,000 loan at 6.5% that extra $4,740 a year cuts roughly four years and four months off a 30-year term and saves about $187,000 in interest. The catch is that some lenders divide the monthly amount by 2.17 rather than 2, which removes the benefit entirely.
Key takeaways
- There are 26 fortnights in a year but only 12 months, so half-monthly payments made fortnightly total 13 monthly payments.
- On a $750,000 loan at 6.5%, true fortnightly repayments save about $187,000 and finish the loan four years early.
- Ask whether the fortnightly figure is the monthly amount ÷ 2 or ÷ 2.17 — only the first produces the benefit.
- Weekly repayments add very little beyond fortnightly; the gain comes from the extra annual payment, not the frequency itself.
Where does the extra payment come from?
A year has 52 weeks, or 26 fortnights, but only 12 months. If your monthly repayment is $4,740 and you instead pay $2,370 every fortnight:
- Monthly: $4,740 × 12 = $56,880 a year
- Fortnightly: $2,370 × 26 = $61,620 a year
The difference is $4,740 — exactly one additional monthly repayment, paid without any conscious decision to pay more. Because it lands as extra principal, it compounds for the remaining life of the loan.
What does it save?
On a $750,000 loan at 6.5% over an original 30-year term:
| Frequency | Payment | Paid per year | Loan repaid in | Total interest |
|---|---|---|---|---|
| Monthly | $4,740 | $56,880 | 30 years | $956,500 |
| Fortnightly (÷2) | $2,370 | $61,620 | 25 yr 8 mo | $769,300 |
| Weekly (÷4) | $1,185 | $61,620 | 25 yr 7 mo | $767,500 |
Weekly and fortnightly land within a month of each other. The 13th payment does the work; paying more often just moves money slightly earlier.
The catch: ÷2 or ÷2.17?
Some lenders calculate a "fortnightly" repayment as the monthly amount × 12 ÷ 26, which is the monthly figure divided by about 2.17. On our example that is $2,187 rather than $2,370.
That produces exactly the same $56,880 a year as monthly repayments. You get the cash-flow convenience of aligning with a fortnightly pay cycle, and none of the interest saving. Before switching, ask the lender directly: "Is the fortnightly repayment my monthly repayment divided by two?"
Is it better than just paying extra?
Mathematically they are the same thing — an extra $4,740 a year against principal. The difference is behavioural. Fortnightly repayments automate the extra payment, whereas a manual extra repayment competes with everything else each month.
One caveat worth checking: on a fixed-rate loan, extra repayments are frequently capped (commonly $10,000 to $30,000 a year), and a fortnightly schedule that pushes you past the cap can trigger a break cost.
Frequently asked questions
Can I switch repayment frequency at any time?
On most variable loans, yes, and usually at no cost through internet banking or by contacting your lender. Fixed loans are more restrictive and may limit both frequency changes and the size of extra repayments.
Does fortnightly repayment help if I have an offset account?
Less than you would expect. If surplus cash is already sitting in an offset it is already reducing the interest charged. The main gain from fortnightly repayments is for borrowers who would otherwise spend the money.
Will my lender reduce my repayment after the extra payments?
Some lenders automatically recalculate the required repayment downwards as you get ahead, which quietly cancels the benefit. Ask for the loan to stay on its original repayment schedule so the extra stays working.
Related reading
- Amortisation Schedules: Reading Your First 12 Months
- Comparison Rate: What It Includes and What It Hides
- How a 0.25% Rate Rise Changes Repayments, by Loan Size
Sources
- Making extra repayments on your home loan — ASIC Moneysmart
- Housing lending rates, statistical table F6 — Reserve Bank of Australia
Rates checked as at 2 September 2026. Interest rates, lender policies and government schemes change frequently. Figures in this article are illustrative and were accurate at the date shown.
General advice warning: This article contains general information only. It does not take into account your objectives, financial situation or needs, and it is not personal credit or financial advice. Consider whether it is appropriate for you and seek advice from a licensed credit representative before acting.
Any interest rate shown is an example only and is not an offer of credit. Where a rate is quoted, the applicable comparison rate is available from the relevant lender and should be considered alongside it.
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