This simple mortgage move could save you 525 weeks as rates drop this year
Tuesday, 6 January 2026
The author Oliver Burkeman once ran an experiment with his friends, asking them how many weeks they thought the average person would live.
Some responded with six-figure sums, despite the fact that 100,000 weeks would take you back to the year 109 AD, when Rome was ruled by the Emperor Trajan.
In reality, the average human life is a staggeringly short 4000 weeks.
By the time you’ve started your career (at roughly 21), you’ve already expended 1000 of those weeks. And given many of us are hoping to retire at 65, the last 750 weeks (or 15 years) of your life are also removed from those key earning years.
This leaves you with around 2250 weeks to not only pay off your mortgage but also fund your retirement.
To put this into the context of an average 30-year mortgage, you could end up tied to this responsibility for 1500 of that meagre career allotment of 2250 weeks.
The point here is that we have a far shorter runway than we might realise – and it’s shortened even further by career breaks, redundancies, health issues or economic meltdowns.
Research often shows that we’re terrible at planning for the future. As the behavioural economist Dan Ariely noted: “We all think that in the future, we are wonderful people. We will be patient, we will not procrastinate, we will exercise, we will eat well… The problem is we never get to live in that future. We always live in the present.”
The problem is that years can feel abstract, distant and disconnected from where we are today. Burkeman’s assessment is that becoming patently aware of the finite number of weeks we actually have allows us to prioritise better.
And this becomes quite pertinent when you start looking at the big numbers that go into the average New Zealand mortgage.
What’s a week worth?
Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene, recently told me that around 40% of fixed mortgage rates will come up for renewal in the first half of 2026.
Homeowners will face a significant choice: maintain the same repayment level or reduce their payment and pocket the extra money.
“ Keeping payments at the same level after refixing is one of the simplest ways to get ahead,” says Sullivan.
“When rates fall, the extra you keep paying goes straight to principal, which can cut years off the term and save a meaningful amount of interest.”
Looking at the example of a standard $500,000 mortgage refixing from around 7% to 4.75%, Sullivan says that this will reduce the minimum payment from $3,327 to $2,608 a month.
“If you keep paying the $3,300, you can shave over a decade off a standard 30-year loan,” he says.
“For households under pressure, the priority is breathing room and rebuilding a buffer. For everyone else, holding the line is a sensible move.”
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Sullivan isn’t wrong. By keeping your payments the same, the term of your mortgage will reduce to around 19 years and 4 months.
Put another way, you give yourself roughly an extra 525 weeks to save for your retirement.
What the numbers show
Westpac chief economist Kelly Eckhold says many existing mortgage holders tend to keep their payments the same as interest rates rise and fall, which means mortgages lengthen or shorten as interest rates change.
“However, a proportion of people do reduce their payments, so we see the total value of payments reduce as interest rates fall, which boosts spending,” says Eckhold.
The latest figures from the Reserve Bank show that scheduled repayments on mortgages have dropped from $7.67 billion in December 2024 to $7.37 billion in September 2025.
What this translates into is around $300 million not being used to pay down principal, keeping homeowners locked into those longer-term mortgages.
The added problem is that all forecasts suggest interest rates will not stay this low for long.
In a recent forecast, Eckhold anticipated as many as six hikes, leading the Official Cash Rate to rise from 2.25% today to 3.75% by the first half of 2028.
Looking at these numbers, the opportunity to shave valuable weeks off the full term of your mortgage is not likely to be better in the near future than it is today.
Strategic rethink
The payment level isn’t the only way to reduce the number of weeks you’re tied to your mortgage. As thousands of Kiwi homeowners roll off their fixed terms, they’ll also have the opportunity to rethink the structure of their mortgages.
Financial adviser Katie Wesney, the head Strategic Coach at Enable Me, says that one way to do this is by restructuring a portion of your debt to a revolving credit account.
When it comes to your mortgage, a revolving credit account acts like an overdraft facility attached to your house. You get to choose the amount associated with it, and this is then placed on a floating rate.
The real benefit of this lies in the way banks charge interest. Your bank actually calculates mortgage interest daily (which is perhaps again why it pays to think weekly). So by putting your entire pay cheque into the revolving credit account, you artificially lower your debt balance for a few weeks. You’ll eventually pay bills throughout the month, but the average amount of interest you’ve had to pay over the course of the month will be lower than compared to a flat rate applied to the total amount.
Wesney says the strategy could work in the following way: as rates drop, you calculate how much you would save in repayments every week. If, for instance, dropping rates saves you $193 a week (or around $10,000 annually).
“The key is keeping most of your mortgage on fixed terms where rates are lower, and only floating what you can realistically repay within a year,” says Wesney.
“Think of revolving credit as your financial shock absorber, not your main mortgage structure.”
The other good thing about this approach is that you retain access to the money in the event of any emergencies or crises.
The one catch is that you need to be disciplined. If the temptation to tap into that money is too great, then you won’t derive any benefit from this approach at all.
“Easy access means easy temptation,” says Wesney.
“If you know you’ll dip in for non-essentials, the simpler strategy wins - just keep your repayments the same on a standard mortgage and let time do the work.”
A similar banking product that is also gaining popularity is an offset account, which allows you to offset your savings (an emergency fund, for example) against a certain portion of your mortgage. By doing this, you will not pay any interest on the amount that is being offset, which again presents an enormous opportunity to cut time out of your mortgage.
The point in all this is that you do not have to be trapped in your mortgage for the full 30-year term. By making simple decisions, you can quickly slice massive chunks out of that term.
After all, every week saved feels a little more valuable when you realise you only have 4000 weeks in total.
Disclaimer: The information in this article is of a general nature and is not intended to be personalised financial advice. It does not take into account your individual circumstances or financial goals. Personal financial advice is best sought from a registered financial adviser.