11 ways to save money on your mortgage

Follow our 11 tips to help take the stress out of paying your mortgage.

1. Borrow as little as possible

If you are thinking of borrowing an extra $50,000 for renovations, consider the extra cost in interest first. If you borrow $300,000 instead of $250,000 at 5% over 20 years, you’ll pay an extra $29,000 in interest. Can you hold off on that renovation until you have some more money in the bank?

2. Negotiate with your lender

• Don’t assume the advertised interest rate is the only option for you. Ask your bank to match other offers.

• You can also negotiate on things such as interest rates and fees on other accounts.

• Interest rates are not the only thing banks compete on. Ask about special offers for new customers.

• Our independent survey of banking customers lists the banks that rank well for overall customer satisfaction when it comes to mortgage interest rates.

3. Get as short a term as you can afford

The payments will be higher, but you’ll pay much less in interest. Shaving 5 years off a 20-year mortgage of a $300,000 loan at 5% can save you nearly $50,000!

4. Pay fortnightly instead of monthly

Broadly speaking, a month is two fortnights. But there are not 24 fortnights in a year; there are 26. Paying half your monthly repayment fortnightly means you will make an extra month’s repayment each year.

5. Fixed rates are generally going to save you money compared with floating rates

However, if you want flexibility with your payments, consider having a portion of your loan on a flexible interest rate. Read more at our article: Mortgages: Should you fix or float?

6. Ask your bank if you’re eligible for a special interest rate

These rates are lower than the standard fixed rate of the same term. In September 2025, the average 1-year rate was 5.37%, compared with an average special rate of 4.73%.

Not all customers will be eligible for a special rate. You’ll usually need a certain percentage of equity in your home, such as 20%.

7. Make regular payments as large as possible

Do a budget and work out how much you can pay off your mortgage. The more of your loan principal you can pay off, the less interest you will be charged. Even a little bit extra will make a big difference on the interest you might pay over 20 years.

8. Make extra payments

Whether it’s drip-feeding small amounts or making a one-off lump sum, anything extra you can pay will help reduce your costs. However, if you’re on a fixed rate, check you won’t incur any fees by making extra payments. Find out about the pros and cons of fixed and floating interest rates.

9. Avoid adding extras to your mortgage

For example, don’t buy a new car and add the loan for it to your 25-year mortgage. Chances are the car will be in a wrecker's yard before you've paid it off. If you have to, make sure you pay off the extra amount in the same period you would have paid off a separate loan. Otherwise, you'll pay much more in interest than if you'd taken out a regular car loan over 5 years from a reputable lender.

10. Do your research on mortgage advisers

A mortgage broker or adviser can help you get a mortgage for the first time. But most advisors get paid a commission from the lender, which can create a conflict of interest. Find out what questions you should ask in our report on mortgage advisers.

Real estate agents you meet at open homes may recommend a specific broker or adviser. Check whether there’s an existing relationship or the agent gets a commission from the adviser to ensure there isn’t a conflict of interest. Find out which real estate agent won our People’s Choice award in our 2024 real estate survey.

11. Don’t be afraid to swap banks

It may be a hassle, but it’s a good way to get the best deal. Switching may also be quicker and easier than you think. Your new lender will help you make all the changes. But check you won’t be hit with fees by breaking a fixed-term mortgage. Find out how to switch banks.

What to do when you’re having trouble paying your mortgage

The first step is to talk to your lender. The Credit Contracts and Consumer Finance Act gives you rights as a borrower. You can ask your lender to spread your payments over a longer period or change the terms of your credit contract, if you can prove hardship. You might take a mortgage holiday or decrease the amount of payments you make while increasing the length of your loan. For more information, see What to do if you can’t pay your mortgage.

Watch out for mortgage-reduction agencies. They will refinance an existing mortgage using a revolving-credit facility, but they will charge quite high fees to do this. You could ask your bank to do the same thing. It will set up revolving credit for you for much cheaper.

You should also be cautious of people who offer to lend you money with no deposit. Some might be legitimately trying to help you, but others could be scammers. Get your lawyer to check the paperwork before you sign anything.