Buying guide

How long will it take to pay off my mortgage?

We’ve got all the info on how long it should take to pay off your mortgage and how to get it done sooner.

Last updated: 23 November 2023

In May 2023 the average new home loan in New Zealand was $360,376, according to Reserve Bank figures. Many homeowners in areas like Auckland, Queenstown Lakes, Hamilton and Wellington have much larger home loans to handle.

A mortgage that size can feel overwhelming and you may even feel like you’ll never pay it off - but the fact is, you will. The question is, when and how.

How long does the average mortgage take to pay off?

The majority of new home loans (57%) are issued with a 30 year term, including 66% of new home loans in Auckland and 83% of first home buyer mortgages.

With that said, if you’ve got a 30 year term that doesn’t necessarily mean you have to take 30 years paying your mortgage off. In fact, there are several ways to pay your mortgage off faster that could help you get debt-free sooner.

How to pay your home loan off faster

If you pay your home loan off more quickly than the 30 year term, it means you’ll pay less interest and enjoy more time debt free, with extra disposable income. During this time you could enjoy an improved lifestyle, an early retirement, or just put more money into other interests and investments. To pay yours off early you could:

Increase your repayments

The simplest way to pay your loan off faster is to increase your repayments (which we know, may be easier said than done). If you have a variable rate loan you should be able to increase yours as much as you’d like - if your home loan has a fixed interest rate then you may only be able to increase your repayments by a certain amount (often 20%) every time you re-fix your loan.

Use lump sums

Often when we receive lump sums of cash from inheritances or other windfalls, we save them or spend them. Putting these lump sums into your mortgage could help pay yours off faster.

Paying off a mortgage can be tough for first home buyers.

Make your first repayment on settlement date

Your bank or mortgage broker will most likely offer to make your first mortgage repayment one month after settlement. By simply making your first repayment on your settlement date instead,you’ll pay your mortgage off 30 days sooner. 

Keep your repayments the same when rates fall

When interest rates fall the interest rate portion of your mortgage repayments will decrease and as a result your repayments will be lower. If you keep your mortgage repayments the same when this happens you’ll pay your mortgage off faster. 

Don’t capitalise fees into your loan

Your lender or mortgage broker may offer you the opportunity to add certain charges and fees to your mortgage. Buying a house and refinancing can be expensive so this may be tempting but it can add months or years to your home loan and is best avoided if possible. 

Review your home loan regularly

Your home loan may be your household’s biggest expense so it pays to review it regularly - at least once a year. Does it still suit your lifestyle or could you increase your repayments? How does the loan’s interest rate compare to other loans on the market?

To do this you can either browse other lenders on the internet and approach them yourself or use a mortgage broker to do the legwork for you. This simple act, which may take a few hours once a year could save you thousands of dollars and shave years off your home loan term.

*We hope this article has provided some helpful information. It's based on our experience and is not intended as a complete guide. Of course, it doesn’t consider your individual needs or situation. If you’re considering buying a property, make sure to always do your due diligence, and speak with an advisor if necessary.

Try different mortgage features

There are several different mortgage features that may make paying off your loan easier. You could try an offset account - put savings or extra cash in this account and you’ll only pay interest on your loan principal minus whatever is in your offset account. Revolving credits can also be handy. These turn your mortgage into something like a big credit card. You can pay more whenever you’ve got it then take money out when you need it too.


Ben Tutty
Ben Tutty

Ben Tutty is a regular contributor for Trade Me and he's also contributed to Stuff and the Informed Investor. He's got 10+ years experience as both a journalist and website copywriter, specialising in real estate, finance and tourism. Ben lives in Wānaka with his partner and his best mate (Finnegan the whippet).