NZ Home Loans logoNew Zealand Home Loans shares their top five mistakes to avoid when it comes to paying off your mortgage.

  1. Fixing your entire mortgage. While there are some very tempting fixed rates at the moment, if you choose to fix your entire loan you are also locking in how fast (or slow in most cases) you can pay down your loan payments. The payments will be locked into a payment regime with interest making up to 90% of the total payment. You should always have a small part of your loan floating that you can pay down faster.
  2. Not utilising your income. Offsetting interest with your income should be a no-brainer. It’s simply using your income to reduce your loan balance until you need to spend it. You will have a mortgage for decades and this simple act will save you thousands of dollars in interest.
  3. Having other debt. You want to be focused with your debt, only having mortgage debt will help minimise interest costs and be easier to manage. By consolidating debt you will free up money which, if put into your mortgage, will give you the ability to pay it down quicker.
  4. Only making the minimum monthly repayments. This is never in your benefit as it means you will be trapped in a 25-30 year loan term which will come at a very high cost. Even increasing your repayment by $5 a week could save you $20,000 over the life of your mortgage.
  5. Blindly trusting your lender. Be realistic – it is highly profitable for your lender to allow you to have a mortgage as long as possible, your default set up is likely to err towards this. Understanding this allows you to look for better options than the standard ‘default’ mortgage you will likely end up with.

If you are doing one or more of the above I highly recommend reviewing your mortgage, as you will certainly be costing yourself money.

As a Registered Financial Advisor with New Zealand Home Loans, Kerry Augustine has helped many New Zealanders reduce and pay off their mortgages. Kerry can be contacted on mobile 0274-546-077 or email