Getting the structure right

Tailoring your loan structure to your circumstances could help you pay off your home loan faster.

Tailor your loan

There is more to consider than just the interest rate! The way you structure your home loan can help you pay less interest and could take years off your home loan. It’s important to tailor your home loan to your circumstances, as one size doesn’t fit all. Remember to review the structure regularly as your circumstances change. 

An ANZ Home Loan Coach can help you choose a loan structure to suit your financial situation.

Loan types

Different loan types provide varying levels of flexibility for making extra repayments.

We offer three loan types: fixed rate, floating rate, and flexible – you can choose one or a combination of these loan types based on your circumstances.  



Helpful ideas

Loan structure examples

Here are examples of customers who have structured their loans quite differently – but all in a way that works best for them. These examples are for illustrative purposes only and are only a guide.

First home buyer working to a budget

Yichern is a first home buyer working to a budget.

Yichern has a home loan of $340,000 for his first home. He has to manage his budget carefully and wants to know exactly what his repayments will be. He will have flatmates living with him to help pay the home loan repayments.

He’s decided to fix his loan across two fixed rate periods. That way, if interest rates change in the future, he hasn’t got all his eggs in one basket. He’s put $170,000 on a 1-year fixed rate and $170,000 on a 2-year fixed rate. 

He knows that if his circumstances improve during this time, he can make some additional repayments to his loan without being charged an Early Repayment Recovery, provided he's making his first extra repayment in that year and one of the following applies:

  • He makes regular extra repayments towards his loan and these change his regular payments by less than or equal to $250 per week
  • The extra lump sum repayment he's making is no more than 5% of the loan amount he owes on his loan.

The year runs from the date his fixed-rate period started or the anniversary of the date his fixed-rate period started.

Yichern, a first home buyer

A couple with variable income

Jill and Ravi have variable income and want to be able to make lump sum payments to their loan.

Jill and Ravi have a home loan of $400,000. Ravi is expecting to get quarterly bonuses across the year – they want the ability to use his bonuses to make lump sum payments on their home loan.

Given the variability of Ravi’s income, they’re wary of over-committing themselves. But they still want some flexibility to make additional repayments.

They decide to structure a $350,000 home loan split across two fixed rate periods and $50,000 as a floating home loan so they can make extra lump sum repayments when they have funds available, without being charged Early Repayment Recovery.

Ravi and Jill have a variable income

Looking to pay off as fast as possible

Lisa and Sarah are great at sticking to budget and want to pay off their home loan as fast as possible.

Lisa and Sarah purchased their first home a year ago, with a home loan of $530,000. They’re good at managing their money. For example, they didn’t dip into their savings when they were saving their deposit, and they always pay their credit card off in full without incurring interest costs. 

They chose to split $500,000 across two fixed rate periods and set up the remaining $30,000 as a Flexible Home Loan which they planned to pay down within a year. 

They kept the outstanding balance on their Flexible Home Loan as low as possible to minimise their interest costs. They achieved this by paying their salaries into their Flexible Home Loan account and managing their budget carefully. They made their everyday purchases using their credit card which has up to 55 days interest free. They never used their credit card for cash withdrawals and set up a Direct Debit to pay their card balance off in full each month (so they were never charged interest on their credit card). Note: credit card interest rates are higher than home loan interest rates. So this only works if they avoid being charged interest on their card by not making any cash withdrawals on their credit card and paying the balance off in full when it's due.

They’ve just achieved their goal of paying down their Flexible Home Loan, so they have $30,000 available to redraw. This is great timing because their first fixed home loan is now due for review – they’re going to make a lump sum payment of the $30,000 onto it before re-fixing. Then they’ll start the pay down cycle again!

Lisa and Sarah cooking in the kitchen

Planning for retirement

Sunil and Smita are property investors who want to be mortgage-free when they retire.

Sunil and Smita are both 58 and own two properties. One is the home they live in and the second is an investment property. They have reduced their combined home loan balance over the years to $120,000.

Their goal is to be mortgage-free by the time they’re 65, when Smita will retire and Sunil will go to part time work. They want to enjoy retirement debt-free.

They have structured their remaining loan to be paid off over 7 years and plan to adjust their repayments as necessary to meet this goal. If interest rates reduce they will keep repayments the same (which will reduce the loan term further), and if rates increase they plan to increase their repayments.

This will mean that they will be debt-free by the time they’re 65. 

Smita drinking a cup of tea

Talk to an ANZ Home Loan Coach

ANZ Home Loan Coaches can help you set up or restructure your home loan to suit your circumstances – and help you set your repayments to pay it off faster.

Call us today or book an appointment in branch with an ANZ Home Loan Coach.

Important information

ANZ lending criteria, terms, conditions, and fees apply. Interest rates and fees are subject to change. Read more about our Rates, fees and agreements.

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. 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