Is it better to pay your mortgage fortnightly or monthly?

When it comes to paying off your mortgage, one of the most important decisions you can make is whether to pay it off monthly or fortnightly. While both options have their advantages and disadvantages, understanding the accrued interest calculation can help you make the best decision for your financial situation.

The accrued interest calculation is a way of calculating the amount of interest you will pay over the life of your mortgage. It takes into account the amount of time you have left to pay off your mortgage, the amount of money you are paying each month, and the interest rate you are paying. The longer you take to pay off your mortgage, the more interest you will pay.

When it comes to paying off your mortgage, there are two main options: paying it off monthly or paying it off fortnightly. Paying your mortgage off monthly means that you will make one payment each month, usually on the same day. This payment will include the principal and interest for that month. Paying your mortgage off fortnightly means that you will make two payments each month, usually on the same day. This payment will include the principal and interest for that month, but it will also include an additional payment towards the principal.

So, which option is better? It really depends on your financial situation. If you have a large amount of money saved up and can afford to make larger payments, then paying your mortgage off fortnightly may be the better option. This is because you will be paying off the principal faster, which will reduce the amount of interest you pay over the life of the loan.

On the other hand, if you don’t have a lot of money saved up and can only afford to make smaller payments, then paying your mortgage off monthly may be the better option. This is because you will be able to spread out your payments over a longer period of time, which will reduce the amount of interest you pay over the life of the loan.

No matter which option you choose, it’s important to speak to a mortgage broker to get the best advice for your situation. A mortgage broker can help you understand the accrued interest calculation and determine which option is best for you. They can also help you find the best mortgage rates and terms to suit your needs.

In conclusion, understanding the accrued interest calculation is key to making the best decision when it comes to paying off your mortgage. Paying your mortgage off monthly or fortnightly both have their advantages and disadvantages, so it’s important to speak to a mortgage broker to get the best advice for your situation.