This calculator shows you how much interest you save and how many years you cut off your home loan by paying more than the minimum required repayment. Enter your remaining loan balance, annual interest rate, remaining loan term and repayment frequency, then add an extra amount per repayment, a one-off lump sum, or both, and choose when the extra payments start. It runs a full period-by-period amortisation for your loan as it stands and compares it against the same loan with your extra payments applied, returning your standard minimum repayment, the time saved off your term, the total interest saved, and your new payoff date against the original one. Below that sits a side-by-side breakdown of total repayments and total interest paid with and without the extra payments, plus a table showing your saving at a range of common extra payment amounts, so you can compare an extra $100 against an extra $1,000 per repayment. Because a standard mortgage front-loads interest, starting extra payments early makes the biggest difference to your saving. Before committing to larger repayments, check your bank's rules: fixed-rate loans usually cap penalty-free extra repayments at a set percentage of the balance each year, and some lenders offer redraw or offset facilities worth considering. Figures are indicative estimates based on standard NZ amortisation and should be confirmed with your lender before you change your repayments.
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Updated June 2026
Standard principal-and-interest amortisation formula. Applicable to all NZ home loans.
1. Your Mortgage
$
%
2. Extra Payments
$
$
Your Savings Summary
Standard Repayment
$3,376.04
Per repayment (minimum)
Time Saved
3 yrs 1 mo
Loan paid off sooner
Interest Saved
$75,342
Total interest reduction
New Payoff Date
Jul 2048
vs original: Aug 2051
Without Extra Payments
Loan balance$500,000
Interest rate6.5% p.a.
Loan term25 years
Minimum repayment$3,376.04 / month
Total repayments$1,012,811
Total interest paid$512,811
With Extra Payments
Extra per repayment$200.00 / month
Lump sum paid todayNone
New total repayment$3,576.04 / month
New loan term21 yrs 11 mo
Total repayments (new)$937,468
Total interest paid$437,468
Savings at Different Extra Payment Amounts
Extra per repayment
New term
Years saved
Interest saved
Total interest paid
Summary:Enter your loan details above.
How Extra Mortgage Payments Work
A standard principal-and-interest mortgage has a fixed repayment calculated so that, at the agreed interest rate, the loan balance reaches zero at the end of the term. Early in the loan, most of each repayment covers interest; only a small portion reduces the principal. Over time, as the principal falls, less interest accrues each period and more of the fixed repayment goes toward principal.
When you pay more than the minimum, the extra amount is applied directly to the principal. A smaller principal means less interest charges in every subsequent period. This compounds across the life of the loan: each extra dollar paid today saves more than one dollar in future interest. The result is a shorter loan and a lower total cost.
The Maths Behind the Calculator
The standard minimum repayment is calculated using the annuity formula:
Variable
Description
P
Loan principal (balance)
r
Periodic interest rate (annual rate divided by number of periods per year)
n
Total number of repayment periods (years x periods per year)
M
Minimum repayment = P x r x (1+r)^n / ((1+r)^n - 1)
When extra payments are added, the calculator runs a period-by-period amortisation: starting from the current balance, it applies interest for each period, subtracts the total payment (minimum plus extra), and records the remaining balance. Any lump sum is applied to the balance in the first period. The loop ends when the balance reaches zero, giving the actual new payoff date.
Worked Example
Using the default inputs: $500,000 loan, 6.5% interest rate, 25-year term, $200 extra per month.
Monthly rate: 6.5 / 12 / 100 = 0.54167%
Minimum monthly repayment: approximately $3,377
Total interest without extra payments: approximately $513,000
With $200 extra per month: the loan is paid off in roughly 21 years and 11 months, saving approximately $75,000 in interest and just over 3 years
The earlier you start making extra payments, the greater the saving. Starting extra payments 2 years into a loan saves noticeably less than starting immediately, because the principal is higher in the early years and interest compounds faster.
Tips for Making Extra Payments in New Zealand
Check your break fee rules: on a fixed-rate mortgage, most NZ banks allow up to 5% to 20% of the outstanding balance in lump sum payments per year without a break fee. Check your loan agreement.
Use a revolving credit or offset account: if your lender offers one, parking extra savings there can reduce your interest daily without locking the money away.
Increase your direct debit: the simplest way to make extra repayments is to round up your regular payment and instruct your bank to pay the higher amount each period.
Pay fortnightly instead of monthly: switching from monthly to fortnightly repayments effectively makes one extra monthly payment per year, which can cut several years off a standard 25 or 30 year mortgage.
Apply windfalls: tax refunds, bonuses, or inheritances applied as lump sums have an outsized impact on long mortgages because they reduce the principal the interest compounds on.
Method: Standard principal-and-interest amortisation using the annuity formula M = P x r(1+r)^n / ((1+r)^n - 1). Extra payments are applied period by period as a reduction to the outstanding principal. Lump sum is applied at the start of the first period before interest accrues. All figures in New Zealand dollars. This calculator is for indicative purposes only. Consult your lender or a registered financial adviser before making changes to your mortgage structure.
