Posted by Glenna,
The idea behind the so-called Australian Mortgage is to pay fortnightly instead of monthly. This effectively means that you’re paying twice every 4 weeks, and making 26 fortnightly repayments.
If you think it over, this is really just a way to make overpayments – but in an easy to handle fashion. So, really your combined reepayment is slightly more than your traditional monthly repayment – and the result is that you should repay the total loan quicker.
Problem is … some mortgage companies flat out won’t allow it. Some others will limit the amount you can overpay, so you have to be careful. And, of course, its only good for a repayment mortgage. If your mortgage is an interest only mortgage (maybe with an insurance policy that is designed to repay the capital sum) then this fortnightly (or Aussie) mortgage scheme is not going to work for you.
Hope that helps!