You may have seen the recent Seven Sharp piece where they highlighted that dropping interest rates could save the average Kiwi homeowner around $138 a week on their mortgage. Sounds like great news, right?
But here’s something to really think about...
I ran the exact same numbers they shared through the Sorted mortgage calculator – and what I found might surprise you.
🔢 Here’s What Seven Sharp Said:
- $500,000 home loan
- Interest rate 12 months ago: 6.85%
- Weekly repayments: $756
- Total interest paid over 30 years: $678,685
They then said you could now get a fixed rate of 4.99%, which would reduce your weekly repayments to $618. That’s a $138/week saving.
But what if… instead of pocketing that $138 each week, you left your repayments at $756?
Here’s what happens:
💥 The Impact of Keeping Repayments the Same:
- New loan term: 21 years (not 30!)
- Total interest paid: $293,667
- Interest saved: $385,018
- Mortgage-free 9 years earlier
🤔 So… What Would You Do?
Would you take the $138 and spend it on everyday expenses, or would you keep putting it towards your mortgage to save almost four hundred thousand dollars in interest?
This is a great reminder that just because interest rates have dropped doesn’t mean we need to adjust our spending upward. Small changes in strategy can have a massive long-term impact.
💬 Final Thought:
It’s not just about the savings today — it’s about the freedom tomorrow.
If you’re thinking of refixing or restructuring your mortgage, feel free to reply to this email. I’m happy to walk you through the numbers and help you find the smartest path forward.
To your financial freedom,
Kara Northcott
Independent Financial Consultant
027 666 6784
📩 kara@financialconsultant.co.nz
🌐 kara-northcott-financial-consultant.kit.com
📌 Quick Tip of the Month:
Bookmark the Sorted Mortgage Calculator — it’s a powerful, easy-to-use tool to help you run your own scenarios.
