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Tips to manage your mortgage and pay off your home loan early

12 October 2026

Below is an extract from Sorted's How to manage your mortgage and pay off your home loan early guide.

Left on their default settings, home loans are typically set up in favour of your lender, as you’d expect. Sure, we get a home out of it, but they get a decades-long steady stream of repayments from us, with heaps of interest on top.

That said, as borrowers, we’ve actually got far more options than we typically realise when it comes to reshaping mortgages a bit more in our favour.

By pulling some levers here and there – even just slightly raising our repayments, for instance – we can tip the scales to our side and save immense amounts of interest over time. Here’s how to tweak your settings so paying off your mortgage doesn’t drag on any longer than it has to.

Stay ahead of mortgage rate changes

When interest rates change, it’s a great time to refocus on your mortgage – especially when there’s a sudden turn, like the shift from cheap money (a time of low interest rates) to money that’s far more expensive (much higher rates). To give an idea, here’s the lay of the land for mortgage rates from interest.co.nz.

These seemingly tiny shifts in percentages translate into tens of thousands of dollars over time, so there’s no better moment to prepare – and find a way through a time of higher repayments.

If you’re feeling the pinch particularly because of rate changes and need support, help is at the ready. See below for what to do if your mortgage feels unbearable.

Tips and tricks to stay on top of your mortgage

Shop around for your loan

Bank or broker? Your choice of lender and loan type can make tens of thousands of dollars of difference over time, so it literally pays to shop around. Here’s our guide to shopping for a mortgage.

Refinance to get better terms

Refinancing (also called remortgaging) is when you move your mortgage to another lender in order to get better terms. It’s a great opportunity to save thousands on interest and finish paying off your home more quickly. Here’s how to refinance your mortgage.

Fix and float

On one hand, a fixed rate can give us the certainty of knowing what our mortgage repayment will be, which is why many of us opt for a fixed rate for 2–5 years. However, the fixed rate option generally doesn’t offer much flexibility for extra repayments if you find a bit of spare cash – which would save heaps in interest.

On the other hand, a floating rate goes up and down in line with the Reserve Bank tweaking the Official Cash Rate. While these floating rates are less predictable, they allow you to make higher repayments without a penalty, so you can top up and save tons in interest. Here’s our guide on mortgage types.

To take as much advantage of the plus-sides of both options, many of us have most of our mortgage fixed but also have some on a floating rate.

How to pay off your home loan faster

Top up your repayments

Fixing your mortgage rate can give you certainty about your repayments. But even if your mortgage is fixed, you can typically increase your repayments somewhat above the required amount without getting hit with a penalty. For example, your mortgage repayment may be $3000 a month, but you may be able to repay as much as $3500 on your fixed mortgage without breaking the deal. Check with your mortgage broker or lender.

Repay half your monthly amount per fortnight

If you repay your mortgage monthly with 12 repayments a year, consider switching to fortnights – but pay half your monthly amount. Because there’s 26 fortnights in a year, you’ll end up paying the equivalent of 13 monthly repayments each year. How much could you save by doing this? On the $500,000 loan at 7% over 25 years, repaying $3534 monthly will mean you pay $560,000 in interest. If you halve that repayment to $1767 every fortnight, your interest plunges to $443,000 – close to $117,000 less in interest, and you finish repaying 4 years earlier.

Refinance to a lower rate when available, but keep your repayments up

When (not ‘if’) mortgage rates come down in the future, you could find yourself able to remortgage with a much better deal. Many of us will see this as a way to have extra play money because of the lower repayments, but it’s actually the perfect moment to keep your repayments constant – you’re used to them, after all – and save immensely. For example, let’s say on that $500,000 loan at 7% over 25 years, you keep your repayments at $1630 a fortnight and then refinance to 6%. How much of a difference would this make? At 7% you’d pay $560,000 in interest, while at 6% you’d end up with an interest bill of $370,000 and finish 4 years earlier. That’s $190,000 in interest saved!

Here's what to do with a windfall

May it happen to you often: you come into some money via winnings, an inheritance, selling a business, or a welcome gift. While a huge lottery win might allow you to erase your mortgage entirely, even smaller lump sums can make a sizeable difference to your loan repayments. Say if you dropped $30,000 in one go on your $500,000 mortgage (7% over 25 years). Doing so while keeping your repayments constant would see you finish 3 years early and pay $438,000 in interest overall – that’s $122,000 less. Not bad at all. Lump sums are best paid onto a floating rate mortgage or just after a fixed rate ends, to avoid any penalties for overpaying too much.

What to do when your mortgage feels unbearable

If you’re having trouble making ends meet, it’s best to be as proactive as possible. In the worst case scenario, you could lose your home and the lender will need to sell it via a mortgagee sale. But in most cases there are options so you avoid getting to that point.

Reach out to your bank first 

The best thing to do is contact your lender before getting behind with repayments. Remember, their business relies on borrowers keeping up with repayments. They typically lose money if they have to take back your house and sell it, so it’s in their interest (excuse the pun) to work with you so you can get back on track.

Stretch the term of your mortgage

One option you can explore when you’re in difficulty is to lengthen the term of your mortgage, which can lower the repayment amounts.

Unfortunately, as you can see if you plug your figures into our mortgage calculator, while you do save on repayments, the loan gets incredibly more expensive when you take longer to repay it. But it can be a short-term solution to get by.

Consider the interest-only option 

Another alternative is switching to an interest-only mortgage, where you only pay for the cost of borrowing and don’t pay down the loan principal at all. Although you are putting off repaying your loan, at least you are covering costs and it is not getting more expensive.

Defer your payments temporarily 

In dire circumstances, as you explore your options with your bank, another alternative may be to put off repayments entirely for a while.

It’s important to know that interest will still be added during this time. So deferring comes at a cost, and the mortgage becomes that much more expensive. You only end up owing even more.

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