A mortgage is likely to be the biggest financial commitment you’ll ever make, so it makes sense to try and pay it off as quickly as possible. While there are a number of ways to achieve this – making extra repayments, redrawing from your savings, or even selling your house – one of the simplest and most effective methods is to refinance your mortgage.
In this blog post, we’ll explore how refinancing can help you lower your mortgage and save money in New Zealand. We’ll also provide some useful tips on how to get the best deal possible.
The Different Types of Mortgages
There are two main types of mortgages in New Zealand: fixed rate and floating rate.
Fixed-rate mortgages have interest rates that are set for a specific period, usually between one and five years. This means that your repayments will stay the same for that period, regardless of any changes in the wider market.
This can give you peace of mind and budgeting certainty, but you may end up paying more in interest if rates fall during your fixed rate period.
Floating-rate mortgages have interest rates that move up or down in line with market conditions. This means your repayments can go up or down over time, depending on how interest rates change.
Floating-rate mortgages often start with lower interest rates than fixed-rate mortgages, so they can be a good option if you expect rates to fall over time. However, you need to be prepared for higher repayments if rates rise.
How to Lower Your Mortgage
There are a few things you can do to lower your mortgage in New Zealand. If you have a home loan, you might be able to refinance to a lower interest rate.
You can also make extra repayments on your mortgage, which will reduce the amount of interest you pay over the life of the loan.
If you’re looking to buy a home in New Zealand, there are a few things you can do to help keep your mortgage costs down.
- One option is to buy an older home that doesn’t need as much work.
- You could also look into buying a smaller home or one in an area with lower property prices.
- Another option is to put down a larger deposit, which will reduce the amount you need to borrow and, therefore, the interest you’ll pay over time.
Whatever route you choose, it’s important to shop around and compare different offers before making any decisions. This will help ensure that you get the best deal possible and end up with a lower mortgage that works for you and your budget.
There’s no doubt that lowering your mortgage is a great way to save money in New Zealand. By following the strategies outlined in this article, you can make significant progress toward paying off your mortgage sooner.
Remember to shop around for the best deals on interest rates and fees, and don’t be afraid to negotiate with your bank or lender. With a little bit of effort, you can make big savings on your mortgage repayments.