What is a mortgage repayment holiday?

A repayment holiday lets you pause or reduce mortgage repayments for a period, usually if you are in temporary financial difficulty. Interest still accrues and is added to the loan, so your balance grows and you pay more over the life of the loan.

Does a repayment holiday cost extra?

Yes. Because unpaid interest is added to the balance, you then pay interest on that interest for the rest of the term. The longer the holiday and the higher the rate, the more it costs in the long run.

When is a repayment holiday worth it?

It can be a sensible short-term measure during job loss, illness or another temporary squeeze, to avoid missing payments. The key is knowing the long-term cost so you can weigh it against the short-term relief.

Mortgage Repayment Holiday Calculator

This New Zealand calculator shows the long-term cost of pausing your mortgage repayments. During a repayment holiday interest still accrues and is added to your loan, so the balance grows and you pay interest on that interest for the rest of the term. It can be a sensible short-term measure in hardship, but it is not free. You enter your balance, rate and the holiday length, and the tool shows the added interest and lasting cost.

Mortgage balance

Interest rate

Holiday length (months)

Remaining term (years)

interest added to your loan during the holiday

New balance after holiday$0

Extra cost over the term$0

Assumes interest accrues and compounds onto the balance during the holiday, then the loan is repaid over the remaining term. A holiday can prevent missed payments in hardship, but adds to the lifetime cost. Estimate only, not a loan offer.

How it works

The calculator grows your balance by the monthly interest over the holiday months (when you make no repayments), giving the interest added and the new, higher balance. It then compares the total you would repay over the remaining term on the higher balance against the original, to show the extra lifetime cost of the holiday. The longer the pause and the higher the rate, the more it costs.

Worked example

On a $500,000 balance at 6.5%, a 6-month holiday adds about $16,400 of interest to the loan. Repaid over the remaining 25 years, that extra balance costs roughly $33,000 in total over the term, well above the interest added during the pause itself.

Related calculators

Mortgage Repayment Calculator: repayments.
Mortgage Stress Test Calculator: test affordability.
Interest Only vs Principal Calculator: interest-only cost.
Redundancy Runway Calculator: your runway.

If you've found a bug, or would like to contact us, or learn more about James Graham and Calculate.co.nz.

Calculate.co.nz is partnered with Interest.co.nz for New Zealand's highest quality calculators and financial analysis.

All calculators and tools are provided for educational and indicative purposes only and do not constitute financial advice.

Calculate.co.nz is proudly part of the Realtor.co.nz group, New Zealand's leading property transaction literacy platform, helping Kiwis understand the home buying and selling process from start to finish. Whether you're a first home buyer navigating your first property purchase, an investor evaluating your next acquisition, or a homeowner planning to sell, Realtor.co.nz provides clear, independent, and trustworthy guidance on every step of the New Zealand property transaction journey.

Calculate.co.nz is also partnered with Health Based Building and Premium Homes to promote informed choices that lead to better long-term outcomes for Kiwi households.

Calculate.co.nz is hosted in Auckland via SiteHost new Zealand.

All content on this website, including calculators, tools, source code, and design, is protected under the Copyright Act 1994 (New Zealand). No part of this site may be reproduced, copied, distributed, stored, or used in any form without prior written permission from the owner.