What is a home loan (mortgage)?

A home loan (or mortgage) is a secured loan from a bank or non-bank lender given to the borrower (you) to purchase a home. The borrower pays a deposit and the bank loans them the rest of the money to buy the home. Once a home has been purchased, the borrower will repay the loan, plus interest, until they own the property outright.

Home loans are popular because few home buyers have hundreds of thousands of dollars in their bank account to pay for a new home upfront.

For most Kiwis, a home loan is the biggest financial commitment they will make in their lifetime. Over half of new home loans in New Zealand are issued with a 30 year term1, which means the borrower has up to 30 years to pay off the loan, including interest.

In short, a home loan is similar to any other secured loan – you borrow a certain amount of money from a lender, then pay it back (plus interest and fees) over a set period of time.

  1. https://www.stuff.co.nz/business/128432333/over-half-of-new-home-loans-are-being-issued-with-30year-terms


More frequently asked questions about home loans

You may find the answer on one of the pages below: