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How to get mortgage free faster

Paying off your mortgage fast is a good idea as you'll pay less interest overall. Here are some of the ways ANZ can help you do it.

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 $28,800 $31,200
How long it will take to repay your loan 30 years 23.5 years
Your total interest cost $463,000 $365,000

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.

If you can afford to, consider:

  • Paying a bit extra each time you make a loan repayment, and/or 
  • Making a lump sum payment if you come into a bit of money (for example if you get a tax return or a bonus).

How much extra can you pay?

It depends on what kind of loan you have:

  • If you have an ANZ Flexible Home Loan you can make extra payments any time you like and as much as you like, with no fee. 
  • If you have a floating ANZ Home Loan you can make extra repayments whenever you like with no fee (minimum repayment amount may apply).
  • If you have a fixed ANZ Home Loan, you can make one extra repayment of up to 5% of the outstanding loan balance each year of your fixed-rate period without being charged Early Repayment Recovery.

Not sure which type of home loan is right for you? Compare home loan types.

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.

Consider an ANZ Flexible Home Loan

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 Flexible Home Loan

Handy tips video

Watch this video for some tips on repaying your home loan faster.

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Important information

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.