ASB: Managing your mortgage with confidence

In recent years, high interest rates have put many homeowners under financial pressure. However, the latest ASB Housing Confidence Survey shows that many New Zealanders now see this as a good time to buy, with a net 26% of respondents feeling positive about purchasing in the current market. Lower interest rates and an increasing number of homes for sale are creating favourable conditions for buyers. 

Whether you’re buying your first home or reviewing an existing loan, the decisions you make now can have a lasting impact on your financial wellbeing.

We sat down with Stijn Zwets, Customer Experience Lead at ASB, to unpack some of the most common questions about navigating the home loan journey. From exploring different types of home loans, to applying for a mortgage and discovering ways to pay it off faster, Stijn shares his expert insights below.

Buying your first home can feel overwhelming, but preparing early can make the process clearer. A good starting point is to write down your deposit, income and expenses and use our home loan borrowing calculator to get some estimates on what you can afford to borrow and what your repayments could look like. Having these details in front of you can provide a clearer picture of your position and could reveal you’re closer to owning your first home than you expected.

From there, it can help to think about your goals: where do you want to live, what type of home are you looking for, and what trade-offs are you willing to make? Having a sense of your budget and lifestyle priorities can make it easier to see which options feel right for you.

Once you’ve got a sense of your budget and priorities, then you can look at understanding what’s possible. If you’d like more guidance, an ASB Home Ownership Manager can help, or explore our comprehensive first home buyers guide, with lots of great information for your home ownership journey.

If you’re preparing to apply for a mortgage, these are a few of the things you'll need to think about.

• Deposit size – to get a home loan, your deposit will typically need to be 20% of the property’s value. Depending on your situation, you might be eligible for a low-deposit loan, though these can come with extra conditions and costs to think about.
• Income stability – it helps if you can show a regular history of earnings, whether you’re applying by yourself or with others.
• Healthy money habits – people often stress about the occasional coffee or lunch out, but those small treats aren’t what truly matter. What’s important is demonstrating responsible money habits overall. For example, maintaining a solid savings routine, managing debt wisely, and making payments on time.

KiwiSaver can be a helpful option for first-home buyers. If you’re planning to use your KiwiSaver savings, here are a few things to keep in mind - though there may be others depending on your situation:

• You must have been saving with KiwiSaver (or another complying superannuation fund) for at least three years and meet the eligibility criteria.
• You can withdraw your own contributions, your employer’s, the government contribution, and investment returns. However, you’ll need to leave at least $1,000 in your account, along with any money that has been transferred into your KiwiSaver account from a complying Australian superannuation scheme.
• It must be the first time you’ve made a KiwiSaver withdrawal to buy a home.
• Leading up to your purchase, you might want to review your current KiwiSaver fund and consider whether it’s still appropriate for your goal timeframe. Some people prefer a lower risk fund, if you need your money soon, as you’re less likely to see your balance drop before you need it. If you've got an ASB KiwiSaver Scheme account, you can try our simple tool that helps you pick a fund.

Settlement dates can sometimes be tight, so it’s helpful to allow at least 10 working days for your KiwiSaver withdrawal to be processed. Checking with your provider about their timeframes can make the process smoother.

There are different types of loans you might consider, including a fixed interest rate, variable interest rate, or a revolving credit home loan. Some people will split their lending across a combination of these to suit their goals.

A fixed term mortgage means your interest rate is locked in for a set period of time. This can make it easier for you to manage your finances because you’ll have certainty knowing your payments won’t change over the fixed term. It also means you’ve entered an agreement to keep your interest rate fixed over this period and this agreement may limit what additional repayments you can make. If you decide to break a fixed loan term early, you may face an Early Repayment Adjustment (ERA).

If you need more flexibility, you might like to consider a variable rate home loan or a revolving credit home loan. The interest rate can go up and down with market conditions, but you’ll have the flexibility to repay your loan faster without cost.

Staying on floating rates while you’re waiting for the perfect fixed rate can sometimes lead to higher costs over time. Exploring strategies with your home loan provider can help you find options that work with your goals and personal circumstances.

Once you’ve secured your home loan, the question becomes: how can you pay it off sooner and save on interest? Here are some strategies you might like to consider:

• Increase your repayments: Even an extra $20 a fortnight makes a difference. At ASB you can increase repayments by up to $500 per fortnight on a fixed loan or make unlimited extra payments on a variable loan.
• Keep your repayments the same when your interest rate drops: If your rate decreases, sticking with the higher repayment amount will pay down the principal faster.
• Make lump sum payments: Using bonuses, tax refunds or savings can shave time off your loan. 

Another way to get ahead is by making your home more energy efficient, which can also save you money in the long run. At ASB, we’ve partnered with Cogo to offer the Better Energy Calculator – it’s a great way to see how much you could save on your energy bills by upgrading your home and car to electric. We also offer the ASB Better Homes Top Up, allowing eligible home loan customers to top up their home loan to help make your home warmer, drier or more energy efficient. It could also be used to help purchase a hybrid or electric vehicle.

For more information, read about the ASB Better Homes Top Up here.

Interest rates will always change, but having a clear budget and making use of available tools can help you feel more confident about managing your home ownership journey.

It’s less about perfectly timing interest rates, and more about taking small, consistent steps that keep your home loan working for you.

And remember, no matter where you are on your home ownership journey, an ASB Home Ownership Manager can help answer any questions you have each step of the way – at a time and place that suits you.

At ASB, we’ve got digital tools to give you more control over your home ownership journey:

• Borrowing calculator – estimate how much you can afford.
• Repayment calculator – compare repayments across different terms and rates.
• ASB Home Central – manage your home loan online. You can adjust repayment amount, change payment frequency, make lump-sum payments, fix or refix your loan, and even view your property’s estimated value. It shows you how small adjustments can shorten your loan term and save interest.
• Home Loan Application Tracker – see where your application is at, with step-by-step updates.