Paying off your mortgage in just 10 years might seem ambitious, but with the right strategy and the right mortgage product, it’s achievable. This guide shows how New Zealand homeowners can do it while saving thousands in interest.
Why Aim for 10 Years?
- Save on interest: Cutting a 30-year mortgage down to 10 years can save hundreds of thousands in interest payments.
- Financial freedom: Becoming debt-free faster lets you invest more, retire earlier, or reduce stress.
- Build equity quickly: More of your payment goes to principal, boosting your home ownership share faster.
Current Mortgage Rates in NZ (2025)
As of late 2025, here are some sample rates from the main banks in New Zealand. These vary depending on deposit, equity, and borrower profile:
| Bank | 1-Year Fixed | Floating |
|---|---|---|
| ANZ | ≈ 4.75% | ≈ 6.29% |
| ASB | ≈ 4.75% | ≈ 6.29% |
| BNZ | ≈ 4.75% | ≈ 6.29% |
| Westpac | ≈ 4.75% | ≈ 6.39% |
Example: Standard vs 10-Year Plan
Let’s compare a $600,000 mortgage at 4.75% interest.
| Plan | Monthly Payment | Total Interest |
|---|---|---|
| 30-Year Term | ≈ $3,362 | ≈ $610,320 |
| 10-Year Term | ≈ $6,353 | ≈ $162,360 |
Note: Higher monthly payments, but massive savings on total interest.
Strategies to Pay Off in 10 Years
- Make extra repayments: Even small extra payments each month reduce principal and cut years off your loan.
- Switch to fortnightly payments: You end up making one extra month’s payment per year without noticing too much.
- Refinance wisely: Review fixed and floating rates regularly. Lock in lower fixed rates when possible.
- Split your mortgage: Combine fixed (certainty) with floating (flexibility for lump-sum repayments).
- Use windfalls: Direct bonuses, tax refunds, or rental income straight into your mortgage.
Risks & Things to Watch
- Rate rises: Floating rates may increase, lifting your repayment amount.
- Break fees: Some fixed mortgages penalize early repayment. Always check terms before making lump-sum payments.
- Cash flow pressure: Committing to very high repayments can limit your flexibility. Keep a buffer for emergencies.
Final Thoughts
Paying off your mortgage in 10 years in New Zealand requires discipline, smart refinancing, and consistent extra repayments. By leveraging current low fixed rates from ANZ, ASB, BNZ, and Westpac, and sticking to a clear plan, you can achieve debt freedom much earlier than the standard 30-year term.
