PAYING OFF
YOUR HOME
LOAN FASTER
FIND OUT HOW
The faster you pay o your loan, the less interest you
could pay over the life of your loan. Even small changes
to the way you structure and repay your loan can
add up. Here are some of the ways ANZ and your
Home Loan Coach can help you navigate the process.
PAYING OFF
YOUR HOME
LOAN FASTER
This brochure contains information only about the options available that may help pay o a loan faster. The brochure
isn’t intended as nancial advice or as a recommendation of any of these options for you and your situation. Please
contact us if you would like nancial advice on your options.
1
+
Interest saved in these examples refers to the interest cost that a customer will not need to pay as a result of making
extra repayments.
vemonths earlier, reducing interest costs
byaround $37,727 over the life of the loan.
In Scenario 2, we look at what happens
when repayments increase by $60halfway
through the loan term (i.e.15years). This
reduces the loan term bytwo years and
four months, reducing interest costs by
$14,429 over the life of the loan.
The earlier you increase your
repayments, the bigger the impact
As you can see, Scenario 1 shows that
the earlier repayments increase (even by
making a lump sum payment), the less
you could pay in interest over the life of
your home loan. Of course, increasing
repayments later into the loan term can
still make an impact.
Note: if you increase your repayments
during a xed rate period on an ANZ
Home Loan you may be charged Early
Repayment Recovery. See page 6
for more information. Talk to us rst
so we can discuss the ways you can
make extra repayments without being
charged an Early Repayment Recovery.
Otherwise we can give you an give you
an indication of the Early Repayment
Recovery we may have to charge.
PAY OFF FASTER, PAY LESS
Getting the structure of your loan
right could help you pay o your
homeloan faster
There is more to consider than just the
interest rate. The way you structure
your home loan may help you pay less
interest and could take years o your
home loan. You can tailor your home
loan to your circumstances, as we know
one size doesn’t t all. And remember
you can review the structure as your
circumstances change.
Small increases to your repayments
could make a big dierence
Any money you pay on top of the
minimum repayment amount helps
pay o your principal (the amount
you borrowed). And the smaller your
principal, the less interest you may pay.
Take a look at the Scenario 1 example on
the next page. This example is based on a
home loan of $400,000 at an interest rate
of 4.00% p.a. for an initial term of 30years.
Increasing the repayments by $30 a week
from the beginning of the loan would
mean paying the loan o three years and
The example opposite provides an estimate/illustration only. It is a guide on how a $400,000 home loan originally
structured on a 30-year term could be paid o faster and is based on the assumption that the 4.00% p.a. interest rate
remains the same for the duration of the loan. Towork out the impact of increasing your home loan repayments, use
ourrepayment calculator (anz.co.nz/repaycalculator). Please note, if you increase your repayments on an ANZ Home Loan
during a xed interest rate period you may be charged Early Repayment Recovery.
USE OUR HOME LOAN REPAYMENTS CALCULATOR TO HELP
WORK OUT THE IMPACT OF INCREASING YOUR REPAYMENTS
ANZ.CO.NZ/REPAYCALCULATOR
Interest
paid
Interest
saved
+
Principal
Repayment Term Interest
Minimum 30 years $286,627
$30 extra a week 26 years 7 months $248,900
Term reduced by
3 years 5 months
Interest saved
$37,727
+
SCENARIO 1: PAYING AN EXTRA $30 A WEEK FROM THE START
Repayment Term Interest
Minimum 30 years $286,627
$60 extra a week from 15 years 27 years 8 months $272,199
Term reduced by
2 years 4 months
Interest saved
$14,429
+
SCENARIO 2: PAYING AN EXTRA $60 A WEEK FROM HALFWAY
$286,627
$400,000
Minimum
repayment
amount
$248,900
$400,000
SCENARIO 1
An extra
$30 a week
from the start
$37,727
$272,199
$400,000
SCENARIO 2
An extra
$60 a week
at halfway
$14,429
2 3
An ANZ Home Loan Coach can help you choose a loan
structure to suit your nancial situation.
STRUCTURING
YOUR LOAN
Dierent loan types provide varying levels of exibility for making extra repayments
We oer three loan types – you could have one or a combination of these loan types based
on your circumstances.
54
The interest rate is xed for a set period.
During that period your repayment
amount stays the same.
When the xed rate period ends, you can
choose to x it at another rate, or let your
loan roll onto the oating rate.
Fixed home loans generally have lower
interest rates than oating or exible
home loans.
They oer less exibility to make
extrarepayments.
How our customers use it to pay o
their loan faster
A large number of our customers choose
to put the majority, if not all, of their loan
on a xed rate. Setting repayments so
that they are more than the minimum
repayment amount for that xed rate and
loan term will also help repay a loan faster.
Customers can also split their lending
across dierent xed rate periods.
If you have an ANZ Home Loan with a
xed rate, there are a couple of ways
you can make extra repayments without
being charged an Early Repayment
Recovery:
• If it’s the rst increase that year, you
can increase your regular repayments
towards your home loan by up to $250
a week.
• Plus, each year you can make an extra
lump sum repayment that’s no more
than 5% of your current loan amount.
The year runs from the date, or the
anniversary of the date, that your xed
rate period started.
Early Repayment Recovery is an amount
you pay us to reect the loss we incur
when you repay some or all of an ANZ
Home Loan early during a xed rate
period. Talk to us before you decide
to repay early, as any Early Repayment
Recovery could be large.
ANZ HOME LOAN WITH A FIXED RATE ANZ HOME LOAN WITH A FLOATING RATE
How our customers use it to pay o
their loan faster
Customers often put some of their loan on
a oating rate if they intend to make extra
repayments from time to time. They can
also increase their regular repayments at
any time.
They may have variable income. Or they
may be expecting some extra money,
which they intend to use to make a lump
sum payment on their loan.
The interest rate on a oating home loan
can move up or down in line with market
changes – which means your repayment
amount can change.
The interest rate is generally higher than
xed home loan rates but you have the
exibility to make extra repayments
whenever you like – a minimum
repayment amount may apply.
Reviewing your loan when it’s time to re-x?
Talk to an ANZ Home Loan Coach, who can help you restructure your
home loan to suit your circumstances when it’s time to re-x.
Reviewing your oating rate loan?
Increasing repayments when circumstances change
(for example if you receive some extra money) could also help
pay o a loan sooner.
6 7
This home loan is a revolving credit
facility on your everyday transactional
account, a bit like an overdraft.
You can pay money into it whenever you
like and redraw it (up to your limit) if you
need to. You’re charged interest on the
outstanding balance, but there are no
setrepayments.
The ANZ Flexible Home Loan has a
monthly fee and often has a higher
interest rate than our other loan types,
but it oers the most exibility.
How our customers use it to pay o
their loan faster
A Flexible Home Loan is designed for
customers who are disciplined with their
money. When managed carefully, this
account may enable them to pay less
interest and pay o their loan faster.
ANZ FLEXIBLE HOME LOAN
Rename your loan to match your goal
In ANZ Internet Banking and goMoney you can add a nickname
and picture to your home loan/s. If you’ve set a goal to reduce
the amount owing on your Flexible Home Loan, it could be
motivating to change the name to reect your goal.
Keeping a lower daily balance reduces
interest charges on a Flexible Home Loan
because interest is calculated on the daily
balance:
• Having all income paid into the Flexible
Home Loan account could keep the
current loan amount as low as possible,
reducing the overall amount of interest
to pay.
• Carefully managing spending, and
using a credit card’s interest free days
to pay for expenses and paying that
card’s balance when it’s due, could also
keep a Flexible Home Loan’s balance as
low as possible. A lower daily balance
reduces interest charges.
Note: Credit card interest rates are
higher than home loan interest rates,
so this only works by avoiding being
charged interest on the card by not
making any cash withdrawals and
paying the card in full when it’s due.
8 9
LOAN
STRUCTURE
EXAMPLES
Here are four examples of customers who have
structured their loans quite dierently.
But all in a way that works best for them.
These examples are for illustrative purposes only and are only a guide. 1110
A COUPLE WITH VARIABLE INCOME
Jill and Ravi have variable income and
want to be able to make lump sum
payments to their loan
Jill and Ravi are borrowing $400,000. Ravi
is expecting to get quarterly bonuses
across the year – they want the ability
to use his bonuses to make lump sum
payments on their home loan.
Given the variability of Ravi’s income,
they’re wary of over-committing
Yichern is a rst home buyer working
to a budget
Yichern is borrowing $340,000 for his
rst home. He has to manage his budget
carefully and wants to know exactly what
his repayments will be. Hehas atmates
living with him tohelp pay the home
loan repayments.
He’s decided to split his loan in two,
with two xed rate periods. That way, if
interest rates change in the future, he
hasn’t got all his eggs in one basket. He’s
put $170,000 on a one-year xed rate,
$170,000 on a two-year xed rate.
FIRST HOME BUYER WORKING TO A BUDGET
He knows that if his circumstances
improve during this time, he can make
some additional repayments to his
loan without being charged an Early
Repayment Recovery, in the following
ways:
• If it’s the rst increase that year, he
can increase his regular repayments
towards his home loan by up to $250
a week
• Plus, each year he can make an extra
lump sum repayment that’s no more
than 5% of his current loan amount.
The year runs from the date, or the
anniversary of the date, that his xed rate
period started.
themselves. But they still want some
exibility to make additional repayments.
They decided to split the amount they’ve
borrowed into three loans. With $350,000
split across two loans with xed rates and
$50,000 as a oating home loan so they
can make lump sum payments when
they have funds available, without being
charged Early Repayment Recovery.
12 13
Sunil and Smita are property investors
who want to be mortgage-free when
they retire
Sunil and Smita are both 58 and own
two properties. One is the home they
live in and the second is an investment
property. They have reduced their
combined home loan balance over the
years to $120,000.
Their goal is to be mortgage-free by the
time they’re 65, when Smita will retire and
Sunil will go to part time work. They want
to enjoy retirement debt-free.
PLANNING FOR RETIREMENTLOOKING TO PAY OFF AS FAST AS POSSIBLE
Lisa and Sarah are great at sticking to
budget and want to pay o their home
loan as fast as possible
Lisa and Sarah purchased their rst home
a year ago, borrowing $530,000. They’re
good at managing their money. For
example, they didn’t dip into their savings
when they were saving for their deposit,
and they always pay their credit card in
full without incurring interestcosts.
They chose to split $500,000 across two
Home Loans with xed rate periods and
set up the remaining $30,000 as a Flexible
Home Loan which they planned to pay
down within a year.
They kept the outstanding balance
on their Flexible Home Loan as low as
possible to minimise their interest costs.
They achieved this by paying their salaries
into their Flexible Home Loan account
and managing their budget carefully. They
made their everyday purchases using
their credit card which has up to 55days
interest free. They never used their credit
card for cash withdrawals and set up a
Direct Debit to pay their card balance o
in full each month (so they were never
charged interest on their credit card).
Note: credit card interest rates are higher
than home loan interest rates. So this only
works if they avoid being charged interest
on their card by not making any cash
withdrawals on their credit card and paying
the credit card balance in full when it’s due.
They’ve just achieved their goal of paying
down their Flexible Home Loan, so they
have $30,000 available to redraw. This is
great timing because their rst xed home
loan is now due for review. They choose
to draw against the Flexible Home Loan to
make a lump sum payment of the $30,000
to reduce the xed home loan before
re-xing it and starting the pay down cycle
on the Flexible Home Loan again.
They have structured their remaining loan
to be paid o over seven years and plan
to adjust their repayments as necessary
to meet this goal. If interest rates reduce
they plan to keep repayments the same
(which will reduce the loan term further),
and if rates increase they will increase
theirrepayments.
This will mean that they should be debt
free by the time they’re 65.
14 15
There are many ways you can repay your loan a little bit
faster. Here is some information that could help.
REPAYING
YOUR LOAN
Pay what you can aord to
Regular repayments are set at an
amount that we believe will be
aordable for you. But, we encourage
customers to be realistic and factor in
any expected lifestyle changes.
Pay more than the minimum
If aordable, paying more than the
minimum could help pay your loan o
faster and may mean less interest over
the life of the loan.
Fortnightly or weekly repayments
Paying fortnightly instead of monthly
means you’ll repay slightly more over the
year as you will be paying the equivalent
of one extra monthly repayment a year. For
example, paying $1,200 a fortnight rather
than $2,400 a month on a $400,000 loan at
an interest rate of 4.00% p.a would reduce
the total interest charged by around
$23,000 and instead of 20 years, the loan
would be paid o two years earlier.*
16 17
CHANGING
YOUR
REPAYMENTS
Is it time to review your life insurance to know if you have
appropriate cover to meet your home loan repayments should
anything happen?
Our Home Loan Repayments calculator (anz.co.nz/repaycalculator)
allows you to work out the potential impact ofincreasingyour
repayment amount.
* The example provides an estimate and is for illustrative purposes only. It is a guide on how a $400,000 home loan could be
paid o faster and is based on the assumption that the 4.00% p.a. interest rate remains the same for the loan term. To work
out the impact of increasing home loan repayments, see our repayment calculator (anz.co.nz/repaycalculator).
18 19
Changing the frequency or timing of
your repayments
You can change the frequency of your
regular repayments or change the day
of month/week they come out. Note if
you ask for changes during a xed rate
period on your ANZ Home Loan, Early
Repayment Recovery may be charged.
Simply call us on 0800 269 4663 or book
an appointment with an ANZ Home Loan
Coach in branch.
Increasing your repayments
On a xed ANZ Home Loan:
• You can increase your regular
repayment amount at the end of your
xed rate period including before
setting up your new xed rate period.
You can do this by using ANZ Internet
Banking or goMoney (if eligible),
calling us on 0800 269 4663 or booking
an appointment in branch with an
ANZHome Loan Coach.
During your xed rate period you can
increase your regular repayments towards
your home loan by up to $250 a week
without being charged an Early Repayment
Recovery, providing it’s the rst increase
that year.
The year runs from the date, or the
anniversary of the date, that your xed
rate period started.
Just call us on 0800 269 4663 or book
an appointment in branch with an ANZ
Home Loan Coach before you decide, as
any Early Repayment Recovery could be
large.
On a oating ANZ Home Loan, you can
increase your repayments any time with
no fee by calling us on 0800 269 4663 or
booking an appointment in branch with
an ANZ Home Loan Coach.
Reducing your repayments
If your situation changes and you need
to reduce your repayments for a while,
talk to us about your options. Call us on
0800 269 4663 or book an appointment in
branch with an ANZ Home LoanCoach.
Reviewing service providers
Review your service providers to ensure
you’re getting the best value. Anymoney
you save on utilities, for example, can be
put towards your loan.
Reviewing your loans
We know circumstances change and
you may need to review your loan’s
structure. Remember, a oating rate on
an ANZ Home Loan gives the exibility
to make extra repayments whenever
you like or increase your repayments
to take advantage of changes to your
circumstances, which could help pay o
the loan faster. Our ANZ Flexible Home
Loans also provide greater exibility to
make extra repayments.
Making lump sum payments
If you have an ANZ Home Loan with a
xed rate, each year you can make one
extra lump sum repayment without
being charged Early Repayment
Recovery, providing that it’s no more than
5% of your current loan amount.
The year runs from the date, or the
anniversary of the date, that your xed
rate period started.
Rounding up repayments
If you’ve chosen a set loan term, the
required repayments are often not round
numbers. Rounding the repayments up
to the nearest $10 or even $100 will help
pay a bit more with each repayment.
For example, rounding up the minimum
fortnightly repayments from $877.67 to
$900 on a $400,000 loan at an interest
rate of 4.00% p.a would reduce the total
interest charged by around $15,000 and
instead of 30 years, the loan would be paid
o one year and four months earlier.*
Make the rst repayment as soon as
you can
You can set your rst repayment as early
as two business days after your loan draws
down. Interest is calculated daily, so every
day you have a reduced balance counts.
Reviewing repayments when interest
rates change
Even small changes can be big. For
example, even if interest rates go down,
keeping repayments the same may help
pay o your loan faster and mean less
interest over the loan’s term.
Pay fees upfront
Paying things like establishment fees and
legal fees separately will cost less than
adding them to the loan. If those costs
are added to the loan amount, you’ll pay
interest on them over the loan’s term.
Talkto us before you decide to repay
more than 5% of the current loan
amount, as any Early Repayment
Recovery could belarge.
On a oating ANZ Home Loan you can
make extra repayments whenever you
like – a minimum repayment amount
may apply.
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Get in touch:
Call 0800 269 4663
Visit anz.co.nz/homeloans
Book an appointment with an ANZ Home Loan Coach at any branch
• Arrange for an ANZ Mobile Mortgage Manager to visit at a time that
suits you. Go to anz.co.nz/mmm
Lending criteria, terms, conditions, and fees apply. A copy of terms, conditions, fees and our Reserve Bank Disclosure
Statement are available at anz.co.nz or a request for a copy can be made at any ANZ branch. The contents of this
brochure are subject to change.
This brochure is current as at January 2024 and the details in it are subject to change.
DON’T GO IT ALONE
ANZ Home Loan Coaches can help you set up or
restructure your home loan to suit your circumstances –
and help you set your repayments to pay it o faster.
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ANZ Bank New Zealand Limited 01/24 H2240117
anz.co.nz