Tailored repayments

Save thousands of dollars in interest and pay off your home loan faster with tailored repayments.

With tailored repayments you can make small increases in your home loan repayments every year, allowing the loan to be paid off quicker and saving you thousands of dollars. By combining this with more frequent payments, you could save even more.

How it works

Every year (on the date you originally drew down your loan), we’ll give you the option to make a small increase in your repayments. You can choose to accept or decline this increase depending on what you can afford, and you will continue to have the option of increasing your repayments every year until you’ve paid off your home loan. Each small increase you accept year to year will help you pay off your home loan faster.

You also have other options when you first set up your home loan repayments. You can choose to make your repayments slightly higher than the minimum amount (for example, paying $640, instead of $634) and make your repayments more frequently. Both of these options can also help you pay off your loan faster.

Did you know?

On a $300,000 home loan with tailored home loan repayments, a home owner could save more than $140,000 in interest and pay off their home loan at least 11 years sooner, instead of 30.

Based on a comparison with a standard table loan over 30 years, at an interest rate of 6% p.a.

How much you could save

The table and graph below shows how tailored repayments could make it possible to be debt-free years faster by accepting the annual increase in repayments. The numbers are indicative only.

tailored repayments graph new

 Standard home loan repayments2Tailored loan repayments
 Loan amount $300,000 $300,000
 Interest rate 6% p.a. 6% p.a.
 Repayment frequency Fortnightly Fortnightly
 Initial repayments $827.15 $956.08
 Loan term 30 years 18 years and 7 months 
 Total interest paid $347,664.34 $ 203,009.03
 Time saved - 11 years
 Interest saved - $141,652.31

More information about this table

We've had to make some assumptions to show you the potential savings.

This table provides illustrative savings of a BNZ home loan with tailored repayments compared to a standard table home loan with the same principal amount, interest rate and repayment frequency and assuming the following. 

1. Your tailored repayment amount is as shown above for the first year and you accept the optional annual increases to your repayment amount.
2. The standard table loan repayment amount is set at the minimum repayment amount and remains constant over the term of the loan.
3. You make all your repayments in full and on time and do not make any additional lump sum repayments or increases to your repayments (other than the tailored repayment annual increases)
4. The interest rate remains the same for the term of your home loan. Note that in reality, interest rates are likely to change.
5. No changes are made to the loan amount and you don’t borrow any extra money on your home loan.
6. Actual amounts may vary slightly due to rounding. 

Calculate how much you could shred

Visit shredmymortgage.co.nz and use our calculator to see how much money and how many years you could save on your home loan.

Other reasons to choose tailored repayments

Flexibility and control

If your income or expenses change, the tailored repayments option gives you the flexibility to change your repayments to suit your budget. Provided you keep within the original term of your loan, you can amend the amount and frequency of your repayments at any time3. Simply contact us.

Budgeting made easier

Once your repayment level is set each year, it will stay that way even if interest rates change during the year. For example, if you’re on a floating rate and rates go down, you’ll pay less interest but more off your principal. But, if rates go up, you’ll pay more interest but less off your principal (but if you want, you can increase your repayments to cover the extra interest).

Automatic reminders

Each year, we’ll automatically give you the option to accept a small increase in your repayments, which you can choose to accept, or decline and keep your repayments the same. Because this is automatic, you don’t have to try and remember to do it every year, we’ll do that for you.

Repay more often to save

Making fortnightly home loan repayments (instead of monthly) means you could pay more off your loan each year. For example, by choosing fortnightly repayments of $250 rather than a monthly repayment of $500, means you’ll make two extra repayments a year and repay an extra $500 off your loan. That’s because there are 12 months in a year but 26 (not 24) fortnights.

Other ways to pay your loan off faster

You can increase the amount of your home loan repayments and/or make lump sum repayments.

  • On some of our fixed-rate home loans you can make extra repayments up to 5% of your loan amount at the start of your fixed rate term without having to pay an early repayment charge.3
  • If you have a variable loan, you can pay as much as you want off your loan whenever you want.

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Home loans help and support

Small Print

All home loans are subject to our lending criteria (including minimum equity requirements), terms and fees. Interest rates are subject to change. An establishment fee of up to $400 may apply for personal lending (the fee may be different for non-personal lending). Not for business purposes.

Tailored home loan repayments are not available on Rapid Repay, Mortgage One, any of our interest only loans, or progressive drawdown loans.

  1. A standard or 'Table' loan, is a loan that is divided into equal regular repayments which are a mixture of principal and interest. At the beginning of the loan, most of the repayment goes towards interest costs, with a small amount of principal repaid. Over time, as the principal is reduced, a larger portion of each repayment goes towards principal as the interest cost reduces.
  2. With some fixed interest rates, if you increase the amount of your repayments, make lump sum repayments, or pay off the loan early, you may incur an early repayment charge.

Read our full home loans terms and conditions