Mortgages
Mortgage costs in Australia
Your mortgage is usually the single largest cost of owning a home - but the headline repayment is only part of the picture. How it is structured, how often you pay, and what happens when rates change all matter.
This is general information, not personal financial advice.
Principal and interest vs interest-only
Most owner-occupier loans are principal and interest - each repayment reduces what you owe as well as covering interest. Interest-only loans lower the short-term repayment but do not reduce the loan balance, so they cost more in interest over time.
Fortnightly vs monthly repayments
Paying fortnightly instead of monthly can reduce total interest because you make the equivalent of one extra monthly repayment per year. The effect is small per payment but meaningful over the life of a loan.
How interest rates affect repayments
On a variable rate, your repayment changes when the rate changes. Even a small rate movement can noticeably change your monthly cost. For a clear sense of your exposure, it helps to see your mortgage alongside your other home costs in one place.
Building a mortgage buffer
A buffer - extra savings or an offset account - gives you room if rates rise or income changes. Even a few months of repayments set aside can turn a rate rise from a crisis into an inconvenience.
Frequently asked questions
Is it better to pay mortgage fortnightly or monthly?
Fortnightly repayments can save interest over the life of the loan because you effectively make one extra monthly repayment per year. The exact saving depends on your loan and rate.
How much should I save after buying a house?
A common approach is to keep an emergency fund covering several months of living costs, plus a mortgage buffer for rate rises. The right amount depends on your circumstances.
Last reviewed: 19 August 2026
