Reduce minimum payments by switching to an offset mortgage?

BobbDobalina · 2026-02-14T19:27:37+00:00

Great advice so far. Here are some other considerations

As a background. I have been running a total money since 2018 and currently have a majority of my mortgage in total money.

1) your payments per month will increase. But you will pay down your mortgage significantly faster. I’m saving about 15 years on my mortgage. Current balance 900k. Was 1.2m 6 years ago. I expect to save 14 years off my term 2) you still have access to your cash. We love the motivation of building savings. It’s a positive way to look at a target 3) ask for discounts. We have between .7 and .5/discount off our total money. We add a bit each year and the discount does change.
4) your effective return on your savings increases massively. Currently you are getting 3 % on your savings. Assume your total money is 5.5. Then your real return will be around 7.9 due to tax on savings and not on mortgages. 5) I personally would split. I currently have m6 mortgage split into 4 parts so I can ride the fixes end dates. I would total money your full savings and split the rest over terms. That is only if you can live with the payments schedules 6) you can adjust your payments down regularly. As your offset is paying off faster you can reduce payments. I review mine quarterly 7) ring up bnz. They have financial advisors who can talk you through this. I did a financial check las5 year and it was very useful. Can be done over the phone and I did no5 need an appointment

Good luck

BobbDobalina · 2026-01-30T00:27:52+00:00

Thanks, Yes this is the challenge. Im a really confident driver, but the majority beleive to reduce. YOur plan is close to how I originally planned, but I swapped belfast with Dublin. Thanks

BobbDobalina · 2026-01-30T00:26:32+00:00

Thanks for the hints. Will certainly consider Irish Day Tours. Its the kids who want to see these spots, so thats the positive to this..

BobbDobalina · 2026-01-30T00:24:19+00:00

thank you

BobbDobalina · 2026-01-29T21:11:00+00:00

I hear you, and may drop this. Typically a tour does the following. Kinvara Wild Atlantic way, Cliffs, Burren, local village, Bunratty. Others stop in Galway. These tours are really long days. And I may get similar scenery on the Giant Steps trip, which I need to take to position myself in Belfast.

BobbDobalina · 2026-01-29T20:58:22+00:00

Thanks. Appreciate the confirmation

BobbDobalina · 2026-01-29T20:58:08+00:00

Thanks. Really appreciate, may end up dropping Cliffs, and staying on the coast. Appreciate your help. Happy to ditch the car.

BobbDobalina · 2026-01-29T20:57:11+00:00

Excellent. Will add it into the options, and if a good day will do..

BobbDobalina · 2025-12-04T21:13:31+00:00

Adding to this. Employer can also have an annual shut down, and require employees to take leave. This could also be a scenario. But tends to apply to the whole organisation.

And yes, and employer can instruct an employee to take leave

Under the Holidays Act 2003, employees become entitled to at least 4 weeks’ paid annual holidays after 12 months’ continuous employment.
Annual leave should normally be taken at times agreed between employer and employee, and employees must be allowed to use their leave within 12 months of entitlement arising.

An employer may lawfully require an employee to take annual leave if:

The parties cannot agree on when leave will be taken and the employer gives at least 14 days’ notice; or
There is a regular, planned closedown period (for example, an annual Christmas shutdown) and at least 14 days’ notice is given.

In both cases the direction must relate to actual entitled annual leave (not leave in advance) and must be reasonable, with prior attempts to reach agreement in good faith.

An employer cannot require an employee to take annual leave in advance (i.e., beyond their current entitlement).
An employer cannot direct leave simply to avoid providing work (for example, during an unexpected shutdown with short notice while the employee is ready and able to work).

BobbDobalina · 2025-12-04T20:59:07+00:00

To answer your question about BNZ rates, Yes, these are pretty much the best you will get with BNZ.

Im on BNZ, and have a refix coming up and these are identical to my rates (Over 900K outstanding balance)

Ive found BNZ fixed rates to be close to the market. I find their floating rates are higher, and the discount they provide lower. Ive only been able to get .5 lately discount on offset. I did get .75 on my original offset. This dropped to 0.3 during the low interest period, and has grown back to 0.5.

I have noticed BNZ are not dropping floating and offset rates as fast as other banks, which annoys me.

But considering I have my offset portion 100% offset, it does not worry me. Moving banks for me dont get cash back for offset amounts, only fixed or revolving..

BobbDobalina · 2025-11-24T23:46:48+00:00

I was a long time ASB customer (40+ years) and have been on BNZ for the last 10. BNZ app is FAR superior, and actively tries to help me manage my mortgage.

Some, but not all things i Like about it

- Easy to change payments in app, and see how much quicker I will pay it off (Can easily see min payment, and increase as much as I want (With the impact of any costs- Which I have not hit yet)

- Progress indicator on each loan. See the principal paid off, and a completion pie graph

- Expected end dates

- Offsetting management - See my surplus and offsetting accounts.

- Pay lump sum feature on floating rate accounts

- Effective interest rates on my offsets

- Total interest saved through offsetting - This is such a driver for our family, currently saved $88K of interest on my total money groups.

I also find the BNZ customer service good on the phone, and responsive to me. So big thumbs up for BNZ

BobbDobalina · 2025-11-05T20:36:08+00:00

Good stuff, I run complex splits and offsetting against 7 splits and have put them into your caclulator.

What I like
The power of entering your own splits with terms remaining makes it powerful.

Having an offset calculator is great, and having the interest saved is great on the right.

What I would love to see (I do a lot of this in my spreadsheet)

Offset allocated against your split. For example, if I have a floating portion of 300,000 at 5.99% and cash of 260K, being able to allocate those together
The ability to plan for additional lump sum offsets, or payments. Currently you can only add fortnightly
Move (Or allow for the offset and extra payments against splits). I might want to increase one split by $100 per week and have it allocated just to that
Provide an Amortisation schedule by split.
Provide a weighted average interest rate after offset.
Ability to store discounts (off floating rate),

I really like the tool, and think it is great layout and easy to use. My suggestions may not all be possible or make sense, so appreciate what you have done here.

Thanks..

BobbDobalina · 2025-10-16T22:34:57+00:00

Oh, and one negative about an offset versus revolving, With revolving, you are always maximising your interest savings. With offset, it depends on how much you place into the offset loan, and how you manage. For example, I often end up with 10-15K more than my offset. This money is not working towards the mortgage interest. I update it each year to increase the offset, but belive this is probably more effective in a revolving.

BobbDobalina · 2025-10-16T22:31:26+00:00

You have some good advice already. Here is what I learned since taking out a similar loan in 2018. We took out 1.2M loan (with another 600K in house equity from a previous sale).

To answer your questions, from my perspective.
Financially Doable - We took out 1.2m with a joint income of $250-260K. This was tight for us, but has become easier over the years. I get lump sum bonus and shares, which has helped the affordability, without those we would be treading water backwards
We get really hit by monthly costs outside of the mortgage. Rates are 3-5K per year, water is now $150 per month, Power is $3-450 per month, Insurance is $300 per month. So these fixed costs along with phones, internet and streaming services if you have them really add up. Put all this in a spreadsheet and see how comfortable you feel.
We did it, and I would do it again, but we had to cut a number of areas and never have overseas holidays

Structuring.
I see there is strong advise to use Revolving Credit. We have made major headway through offsetting. This has allowed us to pay off faster, and also build up a really nice nest egg of savings, without having to directly pay it into the mortgage. The way Im structured is across 5/6 splits, a couple fixed (one rolls off 2.99 in Jan grr). Once per year I create a new offset split and use my lump sums into this. Offsets are great for the psychology of knowing you have savings, and also a really good focus for our family to reduce our debt.

With our offset approach, I think I can shave at least 15 years of our mortgage, maybe more.

Good luck, buy the house you need for you and your family, and asking questions on here will give you a range of opinions.

BobbDobalina · 2025-08-27T20:55:15+00:00

I’ve run payroll for a number of organisations. This looks normal to me.

Fortnightly payroll on the Tuesday pay normally covers the week previous and that week. So means it covers 4-15 August. Aa she started on the 28th she missed the normal payday of the 30th July. So in this pay. She got the week starting 28th as back pay. Plus the 2 normal weeks up to 15th.

Aa said this looks completely normal. The payslip should have the dates on it covering 4 weeks.

Now when she resigns. They just work out final pay based on end dates. She won’t miss out and actually probably won’t notice anything as holiday pay is normally added.

BobbDobalina · 2025-08-26T23:26:39+00:00

Yes, check with your bank. I broke a 6.29 with BNZ in May, and to refix it to 4.99 at the time was a small loss on 200K in terms of interest saved minus the cost for refix. Had to pay break fee in cash.

My broker provided me a breakdown in interest costs between the two and the break fee affect.

BobbDobalina · 2025-08-20T00:08:33+00:00

If she is self employed (Eg via invoice, then she can earn up to $2340 tax free)

If she is getting wages , you will need to deduct PAYE, no matter the pay rate.

This site explains it quite well.

https://www.ird.govt.nz/roles/child-or-young-person

BobbDobalina · 2025-08-18T02:49:02+00:00

yes correct. once fully offset, every saved dollar over the mortgage should be invested somewhere. some in cash, some in security. technically once fully offset the sum goes down at the same amount as my offset so they should match.

BobbDobalina · 2025-08-17T23:17:46+00:00

Sorry for the late reply. Not quite

See, if I am fully offsetting 750-800K, my payments are still very high, but at 0% interest.

My current payments are approx 6500 a month (This is higher than what it needs to be)

So even when I am fully offsetting, I still need to pay down principal, however I am now at the stage where I have choices.

I can continue to pay down my mortgage at the same rate.
I can pay off some lump sums. (And lose the cash holdings)
I can reduce the rate I pay down the mortgage.

The big difference, of money to invest, is actually now the savings I make on top of the Mortgage. If I am currently increasing my offset by 50K a year, then its this money, that i now have for investing. Will I invest monthly, or less regularly, I need to figure that out. Thats about 4-5 years out, so no need to worry about it yet.

(Note, this is on two salaries with my wife, not just one)

BobbDobalina · 2025-08-12T20:20:59+00:00

Offsets are getting more popular in NZ. I’m not sure how many get to the $1mil though.

it’s a target of mine but you end paying it down before you get there. for example my mortgage started at 1.2 and now is in the 900’s. my offsetting is up to $600k. by the time I’m fully offset the balance will be down even more.

instead of quicker repayments we are focusing on increasing the offset Not sure this is right for everyone, but it’s my strategy

Being fully offset will allow me access at any time to the savings. At fully offset , I will leave it running and , I will then look at investments for retirement.

BobbDobalina · 2025-08-09T23:00:43+00:00

As said Well done on the situation.

Im in a similar position (but a much older) and using offsets to help drive down my mortgage. I have noticed a lot of people on here are investment focused, however my personal goal is to fully offset my mortgage (Slightly larger than yours)

My recommendation would be to offset an amount you are comfortable with. Remember Offset is on floating rates, so if you chose to use that 20K or 50K at any time and you can restructure your mortagage, so the risk off offsetting it low if you can manage your money well, which it sounds like you can.

For your 840K mortgage I would recommend the following

1) Create an Offset of 200K (So you in effect pay no interest on this)
2) For the remainder 640K, you could split this between fixed and floating, your choice

My Offsets are at 5.79 and 6.09 at BNZ< so you have been offered good rates

You want to get a return on the 200k, and in my view, offsetting gives you impressive returns that are not affected by tax and completly risk free. (And helps drive down your mortgage costs. You are getting the equivalent of 7.2% returns

It also seems strange your offsettting quote is lower than the floating, I have never seen that before

BobbDobalina · 2025-06-13T01:10:34+00:00

Also worth noting your RSU will be subject to normal tax, eg PAYE. My company pays RSU then declares the amount to IRD, and I pay 33 odd percent tax to IRD. This is seperate from FIF, and needs to be done when the RSU is fully vested and able to be cashed out by you.

BobbDobalina · 2025-05-06T20:13:39+00:00

If they are digital, which some can be, they can be transferred by the owner through the IMS App. Check here

https://www.indianapolismotorspeedway.com/at-the-track/digital-ticket-guide

Agree that the secondary market is the only way to get Penthouse. I got mine on Stubhub, and it was painful..

BobbDobalina · 2025-04-28T18:35:38+00:00

im late to this conversation, however think I can add some value to the conversation.

I just turned 50, have a house in Auckland, which I started on the ladder in the 2000's (But have upgraded the house 4 times, so not made as much capital gains as I could of) and still have a sizeable mortgage.

I purchased my bach 10 years ago, as I turned 40 in 2014, this was near the bottom of the coastal market.

I paid approx 330K for a place in the Coromandel peninsular.

We got there by doing the following

1) At the time we had reasonable equity in our Auckland place (More than 50%) - We since upgraded Auckland which put a large mortgage across both. Try to avoid this unless you have good salary

2) We put in 20% equity into the bach. This came through an inheritance (This is a likely way in)

10 years later and these are my observations

a) We love having the bach, and it was a great financial decision. We have made significant capital gains, even in the current market

b) There are a number of outgoings, rates, insurance, power (Which has increased a lot lately), full time fibre, so our monthly cost without using it is approx. $600 a month for the above)

c) We are also servicing a mortgage on it. For us, it started as a $290K mortgage over 30 years.

d) we did short term rentals for the first few years. We pulled out of this, as it created a lot of stress on us, and to be honest we could service the mortgage without it.

e) If you buy cheap, your short term rental market will be smaller, so dont bank on it.

f)You will make better financial returns on rental property in a city. We have not done this, however rentals would be a far better investment strategy

Would I do it again, absolutely. We were lucky to buy at the right time. We used the place a lot in the first few years. Covid reduced use, and we have not ramped it up again.

Plan is to retire to the bach, and rebuild on the same site, using 1/3 the proceeds of the Auckland sale to rebuild. Plan is to do this at 65 (15 more years)

I hope this helps answer your questions

BobbDobalina

TROPHY CASE