Another possibility to consider is a reducing mortgage. Here you pay off the same amount of principal with each payment so that interest charges fall with time, as do your payments. Whether you take a table or reducing mortgage, you will also be able to choose between a variable or fixed rate mortgage.
With a variable-rate mortgage your interest rate will change whenever New Zealand's central bank raises or lowers interest rates. Or you can fix the rate for somewhere between 1 and 5 years into the future. At the end of this term, you can fix it again or move onto a variable rate package. Some borrowers take a mixture of variable and fixed rate mortgages.
