Planning for a mortgage-free retirement

For many Kiwis, buying their first home now happens later in life, often in their late 20s to mid-30s. With mortgage terms typically spanning 25 to 30 years, it’s important to consider where that timeline will place you as you approach retirement.

Ideally, you don’t want to carry a mortgage into your retirement years. Being mortgage-free when you retire provides financial security and allows you to enjoy your later years without the stress of ongoing loan payments. The good news? With smart financial planning and strategic decision-making, this goal is achievable.

Here’s what our mortgage advisers recommend….

Assess your current mortgage situation

If you're already making steady progress on your mortgage and expect to have a smaller balance remaining by the time you retire, you’re in a strong position. As your loan progresses, a larger portion of your repayments goes toward reducing the principal rather than interest, helping you build equity faster. 

If you aren’t repaying your loan as quickly as you like, then reach out and we might be able to offer advice on ways you can repay it faster -whether that’s freeing up money or refinancing your loan for better terms or rates.

Align your mortgage with your retirement goals

A great strategy for paying off your mortgage faster is to align your repayment timeline with your retirement plan. Start by determining your target retirement age and then calculate how many years remain until that milestone. If retirement is 20 years away, consider adjusting your mortgage structure to ensure it is paid off within that time frame.

To make this work, you may need to restructure your loan and adjust your repayment amounts accordingly. This gives you a clear target and a structured plan to work toward.

Leverage market conditions

Keeping an eye on market trends and interest rate movements can also work in your favour. If interest rates drop, maintaining your current repayment amount (instead of reducing it to match the new lower rate) can significantly reduce your loan term and help you become mortgage-free sooner.

Maximising your KiwiSaver

If you have a KiwiSaver account, it can be another tool to help secure your financial future. At Loan Market Dunedin, we can put you in touch with our trusted partner Kōura Wealth. They can take a look at your current KiwiSaver setup to ensure you’re in the right fund to help you achieve your retirement goals. 

Your mortgage and KiwiSaver can complement each other, so aligning them toward the same financial objectives is a smart move.

Start planning today

Retirement may feel like a distant reality, especially in your 20s or 30s, but taking action early can make all the difference. Achieving a mortgage-free retirement not only gives you financial freedom but also provides peace of mind and greater flexibility to enjoy your life on your terms.

If you’d like to discuss structuring a new home loan or optimising your current mortgage, reach out to our team at Loan Market Dunedin. We’re here to help you create a financial plan that works to support your future goals.

Contact us today to get started!