Free NZ mortgage tool
Pay off your mortgage early
Mix and match strategies to see how much time and interest you could save. Then pick the ones that fit your budget.
Last reviewed
Indicative only
Your loan
Start with your loan, then add any strategies below.
Strategies
An automatic payment on top of your usual repayment.
On a fixed loan, check your lump sum allowance first.
A tax refund or bonus, paid once a year.
26 half-payments a year, the same as 13 monthly repayments.
Time saved
–
Interest saved
–
Each strategy on its own
| Strategy | Time saved | Interest saved |
|---|
Assumes the rate stays the same for the rest of the loan. Extra payments on fixed portions may be limited by your lender.
8 ways to pay off your mortgage faster
You don’t need all of them. Two or three, kept up for years, make the biggest difference.
01
Pay a little extra every week
Even $25 or $50 a week, set up as an automatic payment, comes straight off the principal. Early in the loan it has the biggest effect because interest is calculated on a larger balance.
02
Switch to fortnightly half-payments
Paying half your monthly repayment every fortnight means 26 half-payments a year, the same as 13 monthly repayments instead of 12. Ask your bank to set it up this way.
03
Keep repayments the same when rates fall
When you refix at a lower rate, ask the bank to keep your repayment where it was. You won’t notice the difference, and the extra goes off the loan.
04
Put windfalls on the loan
Tax refunds, bonuses and gifts can go on as lump sums. On a fixed loan, check your yearly lump sum allowance so you don’t trigger a break fee.
05
Use an offset or revolving credit portion
Your pay and savings sit against the loan, so you pay less interest without locking money away. It works best with a disciplined budget.
06
Split your loan across terms
Fixing parts of the loan for different terms gives you regular chances to pay down a portion without break fees, and spreads rate risk.
07
Refix and review every time
Every refix is a chance to negotiate the rate, ask for a cash contribution or move lenders. A small rate cut kept as extra repayments compounds over years.
08
Put pay rises on the loan
When your income goes up, lift your repayment by part of the rise before it disappears into everyday spending.
Before you speed things up
Check your fixed-rate rules. Most banks let you pay a set amount extra on a fixed loan each year without a fee. Over that, a break fee may apply. Floating, offset and revolving portions take extra payments freely. See mortgage break fees.
Keep a buffer. Money paid off a standard loan is hard to get back. An offset or revolving credit portion keeps it within reach.
Higher-interest debt first. Credit cards and car loans usually cost more than your mortgage, so clear those first. See debt reduction.
Common questions
What’s the fastest way to pay off a mortgage in NZ?
Regular extra repayments started early in the loan usually make the biggest difference, combined with keeping repayments the same when rates fall and putting windfalls on the loan.
Can I make extra payments on a fixed loan?
Most banks allow a set amount each year without a fee. Over that, a break fee may apply, so check your loan terms or ask us.
Do fortnightly payments really help?
Yes, if you pay half your monthly amount every fortnight. That adds up to one extra monthly repayment a year. Simply converting to the bank’s fortnightly figure may not do the same.
Should I pay off my mortgage or invest?
It depends on your rate, your tax position and how much risk you’re comfortable with. Paying off the mortgage gives a guaranteed, tax-free return equal to your interest rate.