There are many ways we can help you pay off your mortgage faster:
- Fortnightly versus monthly mortgage repayments
- Making extra mortgage repayments
- Keeping your mortgage repayments the same if interest rates fall
- Taking out a Flexible Home Loan
- Reviewing your mortgage structure
Fortnightly versus monthly mortgage payments
By making your mortgage payments more frequently e.g. fortnightly rather than monthly, you can pay off your mortgage faster and pay less in interest overall. For example, if you have a $350,000 mortgage, making fortnightly payments of $1,100 rather than monthly repayments of $2,200, you’ll pay $2,200 extra each year.
This means you could take four years off the term of your home loan and save you around $57,000 in interest!
| Loan details | Monthly repayments | Fortnightly repayments |
|---|---|---|
| Home loan amount | $350,000 | $350,000 |
| Interest rate | 5.74% p.a. | 5.74% p.a. |
| Repayments | $2,200 monthly | $1,100 fortnightly |
| Annual repayments | $26,400 | $28,600 |
| Loan term | 25 years | 21 years |
| Total interest paid | $310,000 | $253,000 |
Use our Home Loan Repayments Calculator to work out how much you could save.
Making extra mortgage repayments
You can shorten the life of your mortgage and reduce your interest costs considerably by:
- paying extra at each repayment, and/or
- making lump sum repayments (for example if you get a tax return or a bonus).
Extra repayments go straight towards reducing your principal, so they reduce your home loan balance – which means you pay less interest.
With an ANZ Home Loan - Floating Rate or Flexible Home Loan you can make extra or lump sum repayments any time you like for no cost. With an ANZ Home Loan - Fixed Rate you don’t have so much flexibility – but you can make lump sum repayments or increase your repayments by up to 5.00% p.a. of the outstanding loan balance each year of your fixed rate period without incurring an early repayment charge (a $100 early repayment administration fee will apply).
Should you save or repay your mortgage?
It’s your choice and the answer is different for everyone – some people prefer to focus on reducing debt; others prefer to build up some savings as well. However it’s worth considering putting smaller amounts of spare money into your home loan rather than a savings account, because the interest you save on your mortgage will probably be more than the interest you’d earn in a savings account.
Keeping your mortgage repayments the same if interest rates fall
If you have an ANZ Home Loan - Floating Rate and interest rates fall, your repayments will automatically reduce. But if you want to, you can keep your payments at the same level. The extra money will go towards reducing your principal, which will also reduce your interest costs and the life of your mortgage.
Taking out a Flexible Home Loan
If you’re a good money manager, an ANZ Flexible Home Loan can be a good way to get mortgage-free faster. Interest is calculated daily, so by keeping as much money in the account as you can at any given time (e.g. by putting all your expenses on your ANZ credit card and paying off your card every month), you can reduce your interest costs – and the life of your home loan.
Reviewing your mortgage structure
Your circumstances change over time, so it pays to review your home loan from time to time as well. We can help you make sure your mortgage is still structured in the best way for your needs – just contact ANZ.
More information
For more information or to apply for an ANZ Home Loan:
Contact an ANZ Mobile Mortgage Manager
Call 0800 ANZ HOME (0800 269 4663)
Visit your nearest ANZ branch
For the ANZ First Home package, you need an ANZ everyday account with your salary, wages or business income direct credited and an ANZ Serious Saver account. ANZ lending criteria, terms and conditions and fees apply to all loans.
A copy of the Reserve Bank Disclosure Statement published by ANZ Bank New Zealand Limited may be obtained on request from any ANZ branch.
This material is for information purposes only. Its content is intended to be of a general nature, does not take into account your financial situation or goals, and is not a personalised financial adviser service under the Financial Advisers Act 2008. It is recommended you seek advice from a financial adviser which takes into account your individual circumstances before you acquire a financial product. If you wish to consult one of ANZ's financial advisers, please contact us on 0800 269 296.
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