Mortgage Repayments - weekly, fortnightly or monthly?
While the general rule of thumb is to match your repayments to your income frequency, if you want to save on interest or pay your loan off quicker, that might not be the best option.
Here, we take a look at repayment frequency options to help you choose the right repayment frequency for you.
WEEKLY
If you get paid weekly, then making your mortgage payments weekly is probably the best option.
By making more frequent payments, you will usually be saving on interest costs, as interest is usually calculated daily on the outstanding balance – so by paying weekly, you are paying down the principal amount faster. It might not seem like a lot, but it does add up…
By making four weekly payments, you will save interest compared to paying once a month. However, it does depend on how your mortgage repayments are structured to be repaid.
If they are structured to be paid weekly, then you probably won’t be making much in the way of interest savings, as that will already be factored into the total interest cost; if, however, your payment schedule is set up as monthly or fortnightly, then making more regular payments should save you interest.
FORTNIGHTLY
If you get paid fortnightly, but have your mortgage repayment frequency set up as monthly, you could then pay half the monthly mortgage payment each fortnight (which will save interest) or the full amount every second fortnight and pay your other bills on the other fortnight.
This may be most beneficial if your other bills are a similar amount to the monthly mortgage payment.
If you do make your payments fortnightly, but your loan schedule is monthly, paying half your required monthly payment each fortnight will provide two benefits – you will save on interest from making more regular payments AND your loan could be paid off quicker, as you will end up making an additional repayment each year (as there are 26 fortnights in a year, which is equal to 13 monthly payments).
MONTHLY
While making one monthly payment may not give you the potential interest savings that more frequent repayments can, it does make sense if you only get paid monthly – because making your payments late will cost you more in interest and fees in the long run.
However, if you do only make your payments monthly, paying a little bit extra each time will help you to reduce your interest costs and your loan term.
This one is a real head-scratcher!
I am a five-letter word and people eat me.
If you remove the first letter I become an energy form.
If you remove the first two letters, I am needed to live.
Scramble the last three letters and I am a drink.
What am I?
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Latest scams to look out for 👀
Neighbourly hopes to keep you safe by keeping you informed of the latest scams circulating. This week, we are sharing two common text message scams:
NZTA / Waka Kotahi scam:
- The scam is a text message saying it's from New Zealand Transport Agency Waka Kotahi, and it encourages the recipient to pay an overdue road toll by visiting a fake website, threatening to take the matter to court within 15 days if they don’t pay up.
- The aim is to trick people into giving away their personal details or pay them money.
- While it is not the first time toll payments have been utilised by scammers, the threat of court action could see more people fall victim.
- The sender will either be a unknown phone number or unknown email address.
Want to report one of these scams? Do so, on Netsafe
NZ Post scam:
- This scam arrives by test message and says it's from NZ Post.
- The premise is that delivery of your parcel was unsuccessful so in order to rearrange delivery. you must click on a link to give your correct address.
- The aim is to trick people into giving away their personal details or pay them money.
- NZ Post advises people not to click the link, but to report the message to the Department of Internal Affairs by forwarding it to 7726.
Think you may have fallen prey to a scam? Get in touch with Netsafe or contact your bank if it involved your bank details.
Remember, if you didn't expect the message and you are now asked to share personal details or money, then stop contact and seek advice elsewhere.
Feel free to share any below that you've encountered recently. This may help others across the country be aware.
Poll: Have you had a pen pal?
With the invention of the internet and mobile phone communication, pen pals seem to be a thing of the past but it was a common practice at one point.
Did you have a pen pal? Where did you meet them? Share below!
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66.8% Yes
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32.8% No
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0.3% Other - I'll share below!
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