Mortgage Calculator
Compare a table loan and a reducing loan for your home, and estimate the upfront cost of buying (deposit, legal fees, valuation), in New Zealand dollars. New Zealand has no stamp duty.
Purchase Details
Owner-occupiers generally need 20% under the Reserve Bank's LVR rules; a limited share can borrow with less, and a First Home Loan allows 5%. Investors need 30% for an existing property. DTI rules also cap borrowing at about 6 times gross income.
Most New Zealanders fix part or all of the loan for 6 months to 5 years. A floating rate is higher but flexible. Compare the rate and any cash contribution, and split your loan across terms to spread the re-fixing risk.
One-off costs around the purchase: your solicitor's or conveyancer's fees, a registered valuation if the lender requires one, a builder's report or LIM, and moving costs. New Zealand has no stamp duty.
Table Loan vs. Reducing Loan
Table Loan
Reducing Loan
💬 In Plain Words
With a reducing loan you would pay $163,764 less in total interest than with a table loan — but your first repayment would be $1,141 higher. Making extra repayments on a table loan gets you a similar result while keeping the flexibility.
Total Upfront Cost
Estimate for educational purposes. Not included: a lender's low equity premium or margin if your deposit is under 20%, mortgage repayment insurance, home and contents insurance, and any First Home Loan or KiwiSaver first-home withdrawal that would reduce the cash you need. Have the figures confirmed by your mortgage adviser and solicitor before you commit.
Table Loan vs. Reducing Loan: Which Do You Choose?
👋 Simple Explanation
With a table loan you pay the same amount every fortnight or month — easier for budgeting, but you pay more interest in total. With a reducing loan you pay more at the start and less at the end — harder to begin, but you end up paying less interest. Most New Zealand mortgages are table loans, and the same effect as a reducing loan comes from making regular extra repayments, which also keeps your options open.
Table: Repayment = L × [r(1+r)ⁿ] / [(1+r)ⁿ − 1] (level)
Reducing: Principal = L / n (level); Repayment = Principal + Balance × r (falling)
Costs and Rules When Buying a Home in New Zealand
Unlike many countries, New Zealand has no stamp duty on residential property. The upfront costs are your deposit, your solicitor's or conveyancer's fees, a registered valuation if the lender needs one, and a builder's report or LIM. The Reserve Bank's LVR rules (generally a 20% deposit for owner-occupiers) and DTI rules (about 6 times gross income) shape how much you can borrow. Mortgage interest on your own home is not tax-deductible. Add everything up before you decide how much you need saved — it is mostly the deposit.
Frequently Asked Questions
- What is the difference between a table loan and a reducing loan?
- With a table loan (the most common type in New Zealand) the repayment (interest plus principal together) is the same for the whole term — at first you pay mostly interest, and that mix reverses over time. With a reducing (straight-line) loan you repay the same amount of principal every payment, so the repayment starts higher and falls steadily — and the total interest you pay is usually lower. There is also revolving credit, which works like a large overdraft.
- Is there stamp duty when buying a home in New Zealand?
- No. New Zealand does not charge stamp duty or transfer duty on residential property purchases. The upfront costs are your deposit, your solicitor's or conveyancer's fees, a registered valuation if the lender requires one, a builder's report or LIM, and moving costs. The bright-line test can tax the gain if you sell a residential property within two years and it is not your main home.
- How big a deposit do I need for a mortgage in New Zealand?
- The Reserve Bank's LVR rules mean owner-occupiers generally need a 20% deposit, though banks can lend to a limited share of borrowers with less. Property investors need a 30% deposit for an existing property (20% for a new build). Debt-to-income (DTI) rules also cap most owner-occupier lending at 6 times gross income. First-home buyers may qualify for a First Home Loan with a 5% deposit through a participating lender, and can withdraw most of their KiwiSaver towards the deposit.