Source: Radio New Zealand
Data from the NZ Banking Association shows that total home lending rose 17.5 percent in the six months to December, Unsplash/ Towfiqu Barbhuiya
More than 40 percent of people with home loans are paying more than the minimum required, which can save them significant amounts of money over the life of their loans.
Data from the NZ Banking Association shows that total home lending rose 17.5 percent in the six months to December, and almost a quarter of new home loans went to first-home buyers.
There were 70,811 new home loans in the period, up from 60,249 in the first half of 2025. The average value of all new home loans was $392,519, down 3 percent from the previous period.
In total, 42.9 percent of home loan customers were paying more than the minimum repayment, up from 40.3 percent. Only 1.4 percent were behind on their payments, the same levels as previously.
“The fact that over 40 percent of people with a home loan are ahead on their repayments shows a high level of financial capability among New Zealand homeowners. Managing your money well, especially during a time of economic challenges, is a great skill to have,” said NZ Banking Association chief executive Roger Beaumont.
Mortgage adviser Jeremy Andrews, of Key Mortgages, said most people who were rolling over on to lower interest rates kept their repayments the same.
“In some cases clients are increasing a little higher again… The impact of choosing this are huge. For example when comparing how much additional repayments are required to change for example a 30-year loan term to a 27-year loan term to a 25-year alone term is less than a 5 percent in repayments in each case.”
How you can save
With a $500,000 mortgage and a 30-year loan term it could look like this.
At the average variable rate of 5.59 percent, fortnightly payments are $1323 and the mortgage will cost roughly $1.03 million to repay, including $531,709 of interest.
Fixing it for two years at 5.09 percent would lower the fortnightly payment to $1251. The overall bill would be $975,732, including $475,732 of interest.
At the peak of the most recent interest rate cycle, two-year rates were about 7 percent, making a $500,000 mortgage about $1535 a fortnight and costing a total of $1.196 million to repay.
If you kept your repayments at that level, though, when rates dropped to 5.09 percent, you’d only pay $796,815 in total, and $296,816 of interest.
An extra hundred dollars of fortnight would cut the amount of interest to $263,256.
An extra $200 a fortnight would reduce it to $236,765. It would also be clear 13 years earlier.
This isn’t a perfect comparison because rates will move over the course of your home loan.
The data also showed 68 percent of credit cards were paid in full without incurring any interest.
Just over 60 percent of loans were on fixed interest rates, 17.7 percent ton variable and the remainder a mix.
Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
