---
title: How to save 40% on your house
description: What is involved to reduce a term from 30 to 18 years?
---

[NZ Home Loan Blog](https://blog.nzhl.co.nz/articles)

# [How to save 40% on your house](https://blog.nzhl.co.nz/articles/save-40-house)

 Written by [Emily Doran](https://blog.nzhl.co.nz/articles/author/emily-doran) | Tuesday, 18 July 2017

The real cost of owning a house, for most of us, is the cost of funding it.  Let’s assume you buy a $500,000 house and borrow $420,000 as a mortgage. This $420,000 would cost $486000 in interest over a 30 year term (assuming 6% interest rate).

However over an 18 year term the interest cost is $268000, meaning you can save $218,000 or over 40% over the original price of your house. So what is involved to reduce a term from 30 to 18 years?

- The simplest way is to increase your loan repayments by $150pw. A sacrifice now will save you a substantial amount and almost half the time you are in debt for.
- For one of our clients, a monthly surplus of $330 was all that was required to have them debt free in 18 years. For this they needed a properly structured mortgage using their incomes to offset some of the interest cost.
- Extra payments at the start will certainly help achieve this result. A working couple with no children may well be in a position to make extra repayments to start with and then slow off and still clear their mortgage in 18-20 years.

So while shrewd negotiations may help save you some money on purchasing a house, being smart with your mortgage on said house will be much more financially beneficial.

*The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.*

[View full post](https://blog.nzhl.co.nz/articles/save-40-house)

```json
{
  "@context" : "http://schema.org",
  "@type" : "BlogPosting",
  "author" : {
    "@type" : "Person",
    "name" : "Emily Doran"
  },
  "dateModified" : "2019-06-18T01:55:23.320Z",
  "datePublished" : "2017-07-18T01:55:57Z",
  "headline" : "How to save 40% on your house",
  "image" : {
    "@type" : "ImageObject",
    "height" : 350,
    "url" : "https://cdn2.hubspot.net/hubfs/5029003/hand-and-percentage-signs-1250x350.jpg",
    "width" : 1250
  },
  "mainEntityOfPage" : "https://blog.nzhl.co.nz/articles/save-40-house",
  "publisher" : {
    "@type" : "Organization",
    "logo" : {
      "@type" : "ImageObject",
      "height" : 60.0,
      "url" : "https://cdn2.hubspot.net/hubfs/5029003/NZHLfavicon-1.png",
      "width" : 60.0
    },
    "name" : "NZ Home Loan Blog"
  }
}
```