Switching frequency alone doesn’t change your interest rate, but how the fortnightly or weekly amount is actually calculated can make a real difference. The commonly repeated “pay fortnightly and save” tip is only true under a specific calculation method, not automatically.
Why the “26 fortnights” trick works, sometimes
There are 26 fortnights in a year but only 12 months, so paying exactly half your monthly repayment every fortnight effectively squeezes in the equivalent of an extra month’s repayment annually (26 half-payments = 13 monthly equivalents). That’s a genuine, real acceleration effect, but it only exists if the fortnightly amount is calculated as exactly half the monthly figure. If a lender calculates it a different way, that extra effect may not exist at all.
The weekly-comparison trap
Advertised “weekly saving” comparisons can be misleading if they simply divide the monthly repayment by four, that understates the true weekly-equivalent amount, since there are close to 4.33 weeks in an average month, not four. A calculator (or a lender’s marketing page) that skips this distinction can make weekly repayments look artificially cheap.
What to actually check
- Ask your lender directly how the fortnightly/weekly figure is calculated on your specific product
- Confirm whether it’s genuinely half (or a quarter) of the monthly figure, or calculated some other way
- If the acceleration effect matters to you, it can also be achieved directly by making a deliberate extra repayment each year, the two approaches aren’t mutually exclusive
Next step: see Repayment frequency in the Loan Feature Explorer, and use the Calculator Lab‘s repayment tool with the frequency you’re actually considering.