Managing mortgages

At this time of year many of us come back from holiday intent on making some big changes in our lives – like buying a new house, or maybe even moving to a new town.  

If you’ve got your eye on a property but are unsure whether or not you can afford it, check out the Mortgage repayment options calculator on the Retirement Commission’s free and independent website www.sorted.org.nz.

This calculator works out how much your mortgage repayments will need to be depending on the interest rate, period of mortgage, amount, and frequency of repayments. It also shows the total amount you will repay including interest.  

Your mortgage is likely to be your biggest financial commitment, so once you’ve bought a house you should regularly review your loan to make sure you’re still getting the best deal.  

Are your repayments as big as you can comfortably afford? Even boosting your repayments by an extra $25 per week can save you thousands of dollars of interest, and you’ll become mortgage free faster.  

Do your repayments match your pay periods? For example, if you’re paid fortnightly, ask your bank to change to fortnightly repayments.  

Would you become mortgage-free faster by changing the structure of your mortgage or switching lenders? Switching some or all of your mortgage to a cheaper fixed or floating rate, or switching to another lender, may save you thousands over time. But check out any costs that might be involved, like fees for early repayment.  

Even if you’re not planning any changes, it’s a good idea to regularly review your mortgage with your bank – say once every year or two, or whenever your circumstances change. The mortgages section on www.sorted.org.nz has everything you need to compare offers and calculate costs.  

Sorted is packed with information, tools and calculators to help you manage your money.