Westpac's Whanganui customers make most of low interest rates to pay off mortgages sooner

Westpac's Simon Power says people should look at options to pay off their mortgage sooner.

Whanganui home loan customers are taking advantage of low interest rates to pay off their mortgages more quickly.

Westpac says more than 60 per cent of its Whanganui and Manawatū customers are ahead in their repayments - a median of $4754 or seven months of payments.

Simon Power, Westpac NZ's general manager of consumer banking and wealth, said the bank was keen to support more customers to pay off their loans more quickly, which could save tens of thousands of dollars in interest payments over the lifetime of a mortgage.

"And with many mortgage rates falling in the past two weeks to historic lows, it's a great time for customers to get ahead by holding their repayments at the same level at which they have been paying," Power said.

"If people are able to increase the amount they repay each fortnight or month by $50, $100 or even $200 when they re-fix, it can make a substantial difference to their overall interest savings."

People who were able to change their repayments to fortnightly instead of monthly would pay off their home loan faster. They would make two extra repayments per year, reducing the amount owed and interest paid.

"People could also consider increasing their regular loan repayments, shortening the term of their loan, and consider paying lump sums off their loans when it comes time to re-fix. Also, choosing to float a portion of their loan allows them the flexibility to pay off that part of their loan faster.

"Interest rates have fallen recently, so now is an excellent time to pay down some extra debt if you are re-fixing, as well as keeping your monthly repayments the same despite interest rates dropping, in order to pay off your loan faster."