That Home Loan Hub
Welcome to That Home Loan Hub, your ultimate guide to mastering the world of home loans and property. I'm Zebunisso Alimova, here to simplify the complexities of real estate and provide you with expert insights and the latest trends.
Whether you're a first-time homebuyer, an experienced investor, or simply curious about the property market, this podcast is for you. Join me each week as we unlock the secrets to property success and help you make informed decisions. Let's dive into the world of property together!
That Home Loan Hub
What would you do with $1,200 extra each month?
Rates are finally drifting down—and the numbers are a game changer. We take a real $700k mortgage, drop the rate from 7% to 4.49%, and show how repayments tumble from about $4,657 to $3,543 a month. That’s roughly $1,200 back in your pocket every month, or around $324 a week. The big question becomes strategic: do you take the cash flow win, or keep your repayments the same and attack your principal to cut years off your term?
We walk through both paths with live-style modelling and clear, simple math. If you’ve adapted to higher repayments, holding them steady at the lower rate can wipe about 11 years off a 30-year loan. If rates ease further—potentially towards 3.5%—and you maintain those higher repayments, you compound the effect and shave off even more years. We also get tactical on fixed-rate break decisions: when a $15k break fee can be outweighed by $18k in savings, how OCR timing can shift your fee if you wait, and why lender quotes usually expire by 4 p.m. the same day. No fluff—just practical steps to refix, refinance, or split portions so you can balance certainty, flexibility, and speed of payoff.
Along the way, we talk through paying break fees upfront versus capitalising them, stress-test whether adding fees to the loan still leaves you better off, and outline how an adviser can map your options across banks and terms. Whether you need breathing room in your budget or you’re ready to crush the mortgage faster, a falling-rate environment gives you leverage—if you act on it with a plan. If you’ve got questions, ideas for future topics, or want tailored guidance, reach out. Subscribe, share with someone juggling a refix, and leave a quick review to help more Kiwis turn rate drops into real gains.
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Hello and welcome back to that Home Loan Hub. Today we are going to talk about, I completely forgot what.
SPEAKER_00:Um what repayments were last year versus what they are this year with the recent changes in interest rate this week as well. So oh my gosh, that's right. That's right. The rates are falling down.
SPEAKER_01:And what does it mean to you guys? What does it mean and what difference it makes to your life and your living cost and your repayments? So um we thought about a scenario that we've recently been talking to a client about, right? And they're coming off very, very high interest rates, 7% last year. Yep. Yep. 7%. That's crazy. Crazy. If you think about it, right? And that's when people even had 20% deposit. Now we have people that don't have 20% deposit and they don't even have 7%.
SPEAKER_00:No, that's right. Even with the low equity premium on top of you know the current rates, they're not even hitting 6.8. Like they're going to 5.5. Exactly. Exactly. Awesome to see.
SPEAKER_01:So what we thought we will show you, what does it look like if you had a loan of 700,000 right over 30 years? Yep. At 7%, you would have been paying$4,657 a month. So almost five grand a month will be going towards your home loan repayment. To be honest, when we do a joint application, that's one person's salary. Absolutely gone towards paying um home loan. So if we were to model on our current interest rates, and this is the important bit where the advisor help comes in, right? Because we ask you questions. What is important to you? Is it the cash flow or is it paying down your mortgage faster?
SPEAKER_00:Yeah.
SPEAKER_01:Because this is the two avenues that you're going. Now, the current uh what's the lowest interest rate at the moment?
SPEAKER_00:Well, 4.49 for one year is what we've seen um in the major banks.
SPEAKER_01:And uh and this is ahead of OCR review. Correct. They're all dropping the rates. What the heck is going on?
SPEAKER_00:Yeah. So um I'm excited to see um what they're gonna do next week uh after the announcement as well.
SPEAKER_01:Yeah, exactly. So let's um base it on 4.49 per month over 30 years. Their repayments will drop a whooping almost thousand dollars more per month than what they are right now. So the new monthly repayments will be 3543. Wow, yeah. The previous one was four, six, nine, seven. So as you can see, it's almost 11,$1,200 difference a month. Yeah. Right? And this is crazy because this is where you go, okay, I can actually have$1,200 back into my pocket. Um, maybe I don't need to work 50 hours a week anymore. Maybe we can actually afford to buy nicer food. Yeah, um, maybe we can take a trip.
SPEAKER_00:Yeah, you know, and if you break it down to weekly, because I know some of our listeners like to do a weekly budget as well, that's$324 back in your pocket a week. That's crazy. Yeah.
SPEAKER_01:Are you sure? That sounds like a lot of money. It is, it is, it is, yeah. It is, but it's it's crazy. Yeah, however, with this couple that we sat down with, and I said, Look, guys, what if you repay? Like, is it actually affordable for you to pay right now? They're like, Yeah, actually, we can manage. You know, we're used to it now, we can manage. I say, cool. If we actually model on the same repayments that you're doing right now, you're gonna save 11 years of your mortgage. Wow. Straight away. We went from 30 years to 19. Yeah. Just like that. Yeah. Without any changes to their lawn repayments. Yeah, just the interest rate makes a huge difference. Yep. So if you are that kind of um client that's okay with paying what they're paying right now, keep your repayments the same.
SPEAKER_00:Yeah. If you're comfortable with it and you've been managing, continue to do so with the lower interest rate because you'll wipe years off your home loan, you'll wipe interest. Like you won't be paying that much interest on that home loan as well, your interest costs.
SPEAKER_01:And imagine if the things are going along the same way as they are right now, and let's say you fix this for a year, next year you come up, and now the interest rates are 3.5. Me, which is thinking. Um, but if we model at 3.5, your repayments drop again by another$400, you know, a month. And if you kept the repayments the same, you're gonna save another three years of your mortgage. So every time the rate drops, keep your repayments the same, you're gonna shed, shed, shed years of your mortgage. Shave, shave. I think this is what I was trying to do.
SPEAKER_00:Oh shed and shave, same context.
SPEAKER_01:Trying to combine two words together. Awesome. So um, for this client specifically, they were fixed for a longer term because they were freaking out at the time when the rates were high, and they're fixed for like three, four, five years mortgage, uh, despite their advisor. Um, but that's okay, that's okay. So one of their loans is coming out for refix in January. They can fix that portion. Yeah, so that's cool. The other two portions are coming up in the following years. Yeah, the break fee on those was about$15,000. Uh-huh. But when we've calculated how much they can actually save by going onto the lower rate, they can save$18,000. Oh, wow. So they're still$3,000 better off by refixing, by breaking and fixing. Breaking and refixing, yeah. Yeah. So um, again, this is where the power of advisor comes in. This is where you gotta understand your options and actually do real numbers crunching.
SPEAKER_00:Have they broken it? They're thinking about it. Okay, so one thing I I want to point out is if they are thinking about it with the OCR coming up next week, if they want to break, they should break now before OCR. Because if they break after OCR, that break fee may be higher because of the movement and interest rates. That's exactly what I said to them as well. Something to be mindful of.
SPEAKER_01:And remember, when we give you the quotes for the break fees, they're only valid for that day until 4 p.m.
SPEAKER_00:Yeah.
SPEAKER_01:Um, so if we give it to you in the morning, you have to make decisions by 4 p.m. Otherwise, the next day it will be changed again. Yep. It will be probably more in the client environment current climate that we're in, current environment that we're in. So um just be aware of that. The other thing to be aware of that people don't realize the break fee has to be paid up front. Yes, the whole amount. So let's say if the break fee is 15k, you've got to find that money out of somewhere. Yep. And often people don't have that money. So this is where refinancing and topping up your loan can be handy. Yeah, but again, we do the numbers for you because you're adding suddenly that 15k onto your loan over 30 years. Yes. Are you actually better off?
SPEAKER_00:Yeah.
SPEAKER_01:So maybe you're not. You know, maybe you should stay where you are and just suffer through. But that's why you talk to your advisor. Exactly. By the way, none of this is a financial advice. If you want a proper financial advice, please feel free to reach out to us and um we'll let you know how it is. Yeah. Awesome. Anything else to add, Conch?
SPEAKER_00:No, I just think um the current environment and landscape of the interest rate world is looking quite positive with the rates coming back to the four and a halves, which uh was a big shock and surprise because we didn't think that it would happen this soon. Because we did say we'll see four and a half by the end of the year.
SPEAKER_01:We did, we did, and then literally the week after, it happened. So, yeah. So, this is a bit we should say three and a half. Three and a half, let's go universe. Because it sounds like you and I can manifest those things. Okay, awesome. Thank you so much for this episode, guys. Remember, if you've got any ideas for the next topics that you would like us to cover, we're here for you. Feel free to reach out and um feel free to also flick through the previous episodes because we do cover quite a lot. And if you're in a position where you're thinking, maybe, maybe not, am I you know eligible, maybe not, you won't know until you sit down with us and we tell you. Yeah. Don't let your voice in your head tell you. Your voice in your head is not a financial advisor. We are. So feel free to reach out. We uh don't charge you anything, we're free, and we will point you in the right direction. Cool. Thank you, and see you next time.
SPEAKER_00:Bye.
