How to get a home loan into shape

5-6  minute read

In this article we’ll look at strategies you could use to manage a home loan in both good times, and not so good times.

A home loan is usually a long-term arrangement – and it’s important to remember that things can change over that time. Unexpected events can make it harder to meet your repayments. Other times you may be in a better financial position, and can explore options to pay your loan off a bit faster. 


Couple looking at laptop

Has your financial situation changed?

Check out your options

If your situation has changed and you’re struggling to meet your repayments, contact your bank as soon as possible. There may be options to restructure your loan to help relieve financial pressure. 

If you’re an ANZ customer, talk to one of our Home Loan Coaches on 0800 269 4663. We’re here to help. 

Here are some of the potential options for restructuring a loan that you could consider.

Taking advantage of lower interest rates

If you’re on a floating interest rate, it’s worth finding out whether a fixed rate option offers a lower interest rate. Switching to a lower interest rate would mean your repayments could be smaller during the fixed rate period.

What you need to know about this option: With fixed interest rate loans, the interest rate only applies for the fixed rate period (anywhere from six months to five years). At the end of the fixed rate period you could choose another fixed rate period or a floating rate, at the interest rates that apply at that time. It’s also important to be aware that fixed rate loans offer less flexibility, for example if you want to increase your repayments, or make a lump sum payment during the fixed rate period, you may be charged fees. Read about fixed ANZ Home Loans.

Reducing repayments by extending your loan term

You may be able to extend the term of your loan, so you’d pay it back over a longer period. This means your repayments could be smaller, but you’d make more of them.  You can only extend your loan term, if that loan term will stay under 30 years from your draw down date.    

What you need to know about this option: It’s important to be aware that extending your loan term means you’ll pay more interest in the long term, as you’ll take longer to pay it off. That’s why it’s important to carefully consider whether this is the right option for you.

Switching to interest-only repayments

You may be able to switch to interest-only repayments for a period. This means you’ll only pay the interest on the amount you owe. Your repayments will be smaller during this period because you won’t repay any of the principal. 

What you need to know about this option: It’s important to be aware that switching to interest-only repayments for a time, means your loan amount won’t reduce while you make interest-only repayments. After the interest-only period, you must change your loan back to repayments that reduce the principal, or amount owing on your loan, or repay your loan in full. To keep your loan term the same, your repayments may increase. 

You’ll pay more interest as you aren’t reducing what you owe on your loan for a time, costing you more in the long term. That’s why it’s important to carefully consider whether this is the right option for you.

Looking to pay your home loan off faster?

Not everyone will be in a position to repay their home loan faster. But if you’re able to, it makes good financial sense. Not only will you pay less interest overall, you’ll give yourself more flexibility to deal with unexpected events in the future. 


Small changes, big benefits

A few small changes to the way you manage your home loan could make a big difference to your bottom line. To find out more, visit Pay off your home loan faster.

Meet with an ANZ Home Loan Coach

We understand there are many options and it can be confusing. If you’d like help from an expert, talk to an ANZ Home Loan Coach. Our Home Loan Coaches can help you work out the best way to manage your loan to suit your circumstances.


Call us to book an appointment

Important information

This material is for information purposes only. We recommend seeking financial advice about your situation and goals before getting a financial product. To talk to one of our team at ANZ, please call 0800 269 296, or for more information about ANZ’s financial advice service or to view our financial advice provider disclosure statement see anz.co.nz/fapdisclosure