When Is the Best Time to Review Your Mortgage and KiwiSaver?

When Is the Best Time to Review Your Mortgage and KiwiSaver?

Many individuals set up their mortgage and KiwiSaver once and then leave them untouched for years. However, your financial situation is not static. Factors such as income changes, evolving goals, and market shifts can all necessitate a review.

Why Regular Reviews Matter

Your mortgage and KiwiSaver are not decisions to be made once and forgotten. Both are significant components of your financial landscape:

• A mortgage is one of your largest financial commitments.
• KiwiSaver is a vital long-term asset.

If these are not aligned with your current circumstances, you might find yourself:

• Paying more than necessary.
• Missing out on opportunities.
• Not progressing as efficiently as possible.

Key Times to Review Your Mortgage and KiwiSaver

1. When Your Fixed Rate Is Expiring

This is a crucial moment to reassess your mortgage. When your fixed rate ends, you have the chance to:

• Restructure your loan.
• Reassess your repayment strategy.
• Consider the balance between flexibility and certainty.

Even minor adjustments can have significant long-term benefits.

2. When Your Income or Financial Situation Changes

Changes in your financial situation, such as a salary increase or new job, should prompt a review of your mortgage. Considerations may include:

• Increasing repayments.
• Adjusting your loan structure.
• Improving your cash flow strategy.

For KiwiSaver, you might want to review your contribution rates or consider a different fund that aligns better with your goals.

3. When You Are Planning Your Next Step

If you are planning to buy your first home, upgrade, or purchase an investment property, it’s essential to review both your mortgage and KiwiSaver. Key questions include:

• Is your mortgage structure ready for your next purchase?
• Do you have usable equity?
• Are you positioned correctly with lenders?

For KiwiSaver, ensure your fund aligns with your upcoming goals, such as buying a home.

4. When Market Conditions Change

Interest rates and economic conditions fluctuate. It’s wise to review your mortgage when:

• Interest rates rise or fall.
• Lending rules change.
• Market opportunities shift.

This can help you adjust your fixed versus floating strategy and manage risk effectively.

5. When Your Goals Change

Life changes can shift your goals significantly. You might transition from being a first-home buyer to an upgrader, or from a homeowner to an investor. When your goals change, your mortgage and KiwiSaver strategies should also adapt.

6. At Least Once Every 12–24 Months

Even if no major changes occur, it’s good practice to review your mortgage and KiwiSaver every 1 to 2 years. This ensures:

• Your financial structure remains relevant.
• You haven’t missed any opportunities.
• Your strategy continues to align with your goals.

How Mortgage and KiwiSaver Work Together

It’s important to recognize that your mortgage and KiwiSaver are interconnected. Your mortgage strategy typically focuses on short to medium-term goals, while KiwiSaver supports long-term objectives like retirement and home purchases. Reviewing both together can provide a clearer financial picture and improve your planning.

Common Mistakes to Avoid

• Leaving your mortgage unchanged for years.
• Automatically refixing without exploring options.
• Staying in an unsuitable KiwiSaver fund.
• Not adjusting your strategy when your situation changes.
• Treating everything as “set and forget.”

Why Advice Can Make a Difference

A Mortgage Adviser and KiwiSaver Adviser can assist you in:

• Reviewing your current setup.
• Identifying opportunities for improvement.
• Aligning your strategy with your goals.
• Planning your next steps clearly.

It’s not about making constant changes; it’s about ensuring that your strategies work effectively for you.

Final Thoughts

There isn’t a single “best time” to review your mortgage and KiwiSaver. The best approach is to review when circumstances change, when opportunities arise, and regularly over time. So, when was the last time you reviewed yours?

Disclaimer

The information provided in this article is general in nature and does not take into account your personal situation, objectives, or needs. It should not be considered as personalised financial or investment advice. Before making any decisions, it is recommended that you seek independent professional advice relevant to your circumstances.