Should I pay down my mortgage or add to KiwiSaver?

Paying down the mortgage gives a guaranteed return equal to your mortgage rate. Extra KiwiSaver can attract employer and government contributions and market growth, but is locked away. The calculator compares the value each builds.

What makes KiwiSaver attractive here?

For employees, extra KiwiSaver may bring an employer contribution and the annual government contribution, which are free additions, plus long-term growth. The catch is you cannot access it until 65 or a first home.

What makes paying the mortgage attractive?

It is a guaranteed, risk-free return at your mortgage rate, it frees up cash flow sooner, and the money is not locked away in the same way KiwiSaver is.

KiwiSaver vs Mortgage Calculator

This calculator helps you decide whether spare monthly money is better used to pay down your mortgage faster or to make extra voluntary contributions into KiwiSaver. You enter how much spare money you have each month, your current mortgage interest rate, the return you expect from your KiwiSaver fund, how many years you want to compare over, and any extra employer and government contributions KiwiSaver adds each year. The calculator then grows the same monthly amount two ways: once at your mortgage rate, representing the guaranteed value of interest saved by paying down the loan, and once at your KiwiSaver return with the yearly extras added on top. It returns the total value built by extra KiwiSaver contributions, the value built by mortgage paydown, the dollar difference between them, and a plain-language verdict on which option builds more over your chosen period. Use it to weigh a guaranteed, risk-free return and easier access to cash against KiwiSaver's potential for employer and government top-ups and stronger growth, remembering that KiwiSaver contributions are locked away until you turn 65 or buy a first home. The right choice depends on your mortgage rate and expected returns, and the figures are indicative estimates only, not financial advice.

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Spare money per month

Mortgage rate

KiwiSaver return

Years

KiwiSaver extras per year (employer plus govt)

value built over the period (same monthly amount)

Extra KiwiSaver$0

Mortgage paydown$0

Difference$0

Mortgage paydown earns a guaranteed return at your mortgage rate with no risk and frees cash sooner. KiwiSaver may add employer and government contributions and market growth but is locked until 65 or a first home. Estimate only, not financial advice.

How it works

The calculator grows your spare monthly amount at your mortgage rate, which represents the guaranteed value of paying down the loan, since each dollar saves interest at that rate. It separately grows the same amount at your KiwiSaver return, adding the yearly employer and government extras you enter. Comparing the two shows which builds more value, while the notes remind you the mortgage option is risk-free and accessible, and KiwiSaver is locked away.

Worked example

Putting $400 a month toward a 6.5% mortgage builds value as if earning 6.5% guaranteed, around $121,000 over 15 years. The same into KiwiSaver at 6% plus the government contribution (now up to $260.72 a year) and any employer contribution could build a similar or larger sum, but it is locked until 65 or a first home, which is the key trade-off.

Related calculators

Mortgage vs Invest Calculator: pay down or invest.
Managed Fund vs KiwiSaver Calculator: fund or KiwiSaver.
KiwiSaver Calculator: project KiwiSaver.
Mortgage Extra Repayment Calculator: extra repayments.

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