Weekly vs Monthly Mortgage Payments: Which Is Better?
If you’ve ever read that paying your mortgage weekly instead of monthly will save you thousands, you’re not alone. But does this popular piece of mortgage advice really stack up?
Let’s take a closer look at how weekly versus monthly payments work, whether they actually save you money, and what strategy might really help you pay off your mortgage faster.
The Logic Behind Weekly Payments
The idea is simple: by splitting your monthly payment into smaller, weekly payments, you’re reducing the loan balance more frequently. This means that, theoretically, you’ll pay slightly less interest each time because you’re lowering your loan amount a bit earlier.
And yes, this is true—in theory. But the real savings might be smaller than you think.
What You Actually Save with Weekly Payments
Let’s say your monthly mortgage repayment is $2,000 on a 30-year loan with a 2.5% interest rate. If we break that down, about $940 goes toward reducing the loan principal and $1,060 is interest. When paying weekly, you’re chipping away at that principal a little earlier. That’s good, right?
Sure—but here’s what the maths looks like:
Paying $235 of principal a week early saves you roughly 33 cents.
Paying another $235 two weeks early saves about 22 cents.
Paying the third $235 three weeks early saves 11 cents.
The fourth week's payment happens at the same time as the monthly option, so there’s no saving.
All up, you save about 68 cents for that month. And even at the end of your mortgage—when more of your payment is going toward the principal—you’re only likely to save $1.40 per month.
Over a 30-year mortgage, that adds up to a few hundred dollars at best. Not nothing—but not game-changing either.
What About Compounding Interest?
It’s easy to assume that these small savings will snowball over time. But they don’t. Because your loan balance is recalculated monthly (not daily), your position at the end of each month is effectively the same whether you pay weekly or monthly. So there’s no compounding advantage.
In short, weekly payments don’t help you pay your mortgage off faster—unless you trick the system.
The Weekly Payment Trick That Does Work
There is one way weekly payments can make a big difference, and that’s by increasing how much you pay over a year.
Here’s how: if you take your $2,000 monthly payment and divide it by four, you’ll get $500 per week. But there are 52 weeks in a year, not 48—so you’ll actually end up paying $26,000 per year instead of $24,000.
That extra $2,000 a year could cut your mortgage term down by years. In fact, it could knock three years off a 30-year mortgage.
But let’s be clear: the savings are not from when you pay, but how much you pay. You could just as easily increase your monthly payments to $2,166 and achieve the same result.
One catch: if you ask the bank to switch your $2,000 monthly payment to weekly, they’ll usually just divide the yearly amount evenly into 52 weeks—giving you a weekly payment of $461. That’s the same annual amount, just divided differently. So no savings.
If you want to make this strategy work, you need to ask the bank to set your payment manually at $500 per week.
So Should You Pay Weekly?
Unless you’re intentionally increasing your overall repayments, paying weekly instead of monthly doesn’t have a huge financial benefit.
What can be useful is timing your mortgage payments to align with your pay cycle. For example, if you’re paid weekly or fortnightly, setting your repayments to match can help smooth your cashflow and reduce financial stress. That benefit often outweighs the small interest savings from weekly payments.
What’s the Best Way to Save on Your Mortgage?
If your goal is to save thousands over the life of your mortgage, the biggest impact comes from one thing: paying it off faster.
Increasing your payments—either by making extra repayments, rounding up your regular instalments, or paying fortnightly or weekly with a higher annual total—will reduce your interest and loan term dramatically.
But don’t just dive in. The best way to structure your mortgage depends on your income, financial goals, and budgeting style. Chat to a mortgage adviser to figure out a repayment plan that works for you.
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