Make your loan repayments fortnightly instead of monthly
By making repayments more frequently (e.g. fortnightly instead of monthly) you actually repay slightly more over the year. That reduces the amount you owe (your principal) faster, which in turn reduces the overall interest you pay.
In the example below, instead of making monthly repayments, you could pay half that amount each fortnight instead which means you make two extra repayments per year. Based on a home loan of $400,000 at an interest rate of 6.00% p.a., this would mean a saving of $98,000 in interest and you’d repay your home loan 6.5 years earlier!
Repayment frequency example
If you pay $2,400 monthly per month
If you pay $1,200 fortnightly
Total annual repayments
How long it will take to repay your loan
Your total interest cost
The example above provides an estimate/illustration only. It is a guide on how a $400,000 home loan could be paid off faster and is based on the assumption that the 6.00% p.a. interest rate remains the same for the duration of the loan. To work out the impact on your home loan of making more frequent repayments, use our Home Loan Repayments calculator.
Should you put any extra money into savings instead of repaying your home loan?
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, keep in mind that the reduction in the overall interest amount you pay on your home loan, may be more than the interest you'd earn in a savings account.
If you have a floating ANZ Home Loan and the interest rate falls, your repayments will usually reduce. But if you want to, you can ask us to keep your repayments the same. The extra money will go towards reducing your principal, which means you’ll pay less in interest and repay your loan sooner. Talk to us to arrange it.
If you’re disciplined and good at managing your money, an ANZ Flexible Home Loan (also know as a revolving credit facility) can be a good way to get mortgage free faster. It’s like an everyday transactional account and home loan in one. By keeping as much money in the account as you can, you'll lower your outstanding balance – reducing the overall amount of interest you pay.
ANZ lending criteria, terms, conditions, and fees apply. Interest rates and fees are subject to change.
A copy of the Bank's General Disclosure Statement under the Reserve Bank of New Zealand Act 1989 is available on this website or on request from any ANZ branch, free of charge.
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. An ANZ Authorised Financial Adviser will, on request and free of charge, provide you with his or her disclosure statement prepared under the Financial Advisers Act 2008. If you wish to consult one of ANZ's financial advisers, please contact us on 0800 269 296.