My Mate Chose a ‘Cheaper’ Loan Without Me… Now He’s Paying More Per Week 🤦‍♂️

The phone rings. It's one of my mates.

He sounds a bit off, and I can tell he’s about to hit me with a “shoulda called you sooner” moment.

He tells me he just refinanced—on his own—and thought he scored a great deal with a lower interest rate. First repayment came out… and guess what?

His weekly repayment was actually higher than what he was paying before. 😅

Naturally, he was confused. So was I—until I dug into it.

It’s Not Just About the Interest Rate

He structured his repayments weekly, just like before. But now, with the new lender, his weekly amount had jumped—even though his interest rate was lower.

Red flag. 🚩

First thing I asked: “Are the loan terms the same?”

He said yes—same loan amount, same loan term. So it wasn’t that.

Then I asked who the lender was. Boom. Got it.

Here’s the thing most people don’t realise...

Not All Weekly Repayments Are Created Equal

Most lenders calculate weekly repayments like this:

Monthly repayment × 12 (months) ÷ 52 (weeks)

That’s a true weekly amount spread over the whole year.

But some lenders (like the one he picked) do it the lazy way:

Monthly repayment ÷ 4

Sounds easier, sure—but it actually works out to be more per week, because 4 weeks × 12 months = only 48 weeks. You're essentially overpaying.

“Cheaper” Loan, Poorer Cash Flow

Now, I’m not saying the second method is evil. In fact, it can reduce interest overall, since you’re paying off the loan faster.

But if you’re refinancing to ease your cash flow, like my mate was, this method does the opposite of what you’re trying to achieve.

And now, if he wants to switch again? That means more paperwork, more costs, and more time.

Moral of the Story?

📌 Don’t just chase the interest rate.

📌 Don’t assume all lenders calculate repayments the same way.

📌 And for the love of your budget—talk to your mortgage broker first.

As a mortgage broker based in the Northern Beaches, my job isn’t just finding you the lowest rate. It’s making sure the whole structure of the loan actually fits your goals and lifestyle.

Sometimes it's these little, technical details that make or break your financial breathing space.

Need a Second Opinion Before You Refinance?

You don’t have to go it alone. Even if you just want to bounce ideas around or ask a few questions—reach out.

I’m always happy to chat (and help you avoid becoming the next “my mate” story 😬).

Let’s make sure your next move is actually the right move.