Pay Off Your Mortgage Faster Using Investment Properties

Using a smart investment strategy is a perfect way to pay off your mortgage faster and give you financial freedom.

For many Kiwis, paying off the mortgage on their own home is a major life milestone; the finish line in their financial race.

It’s a goal that carries security, pride, and peace of mind.

Most New Zealanders opt for a 30-year home loan and chip away at it month by month. This is the traditional, well-worn path, and while it works, it’s slow. It also means paying hundreds of thousands in interest over the life of the loan.

Surely there’s a smarter way to pay off your mortgage faster? There is.

And while there are a few effective strategies (restructuring loans, using offset accounts, making lump sum repayments), one of the most overlooked, yet powerful, is using investment property to fast-track your journey to mortgage-free living.

Why Paying Off Your Mortgage Faster Matters

Let’s start with the why.

When you take out a 30-year mortgage, you’re not just borrowing the principal; you’re also committing to paying interest on that principal for decades. This means the longer you carry the loan, the more interest you pay.

For example, a $600,000 loan at 6% over 30 years will cost you ~$695,000 in interest alone. That's more than the house itself.

Every extra dollar paid toward the principal early on reduces the compounding effect of interest. It’s simple: the faster you pay down the debt, the more you save.

But what if you don’t have tens of thousands sitting idle to throw at your home loan? That’s where investment property comes in.

The Counterintuitive Move: Take on More Debt to Pay Off Your Own

At first glance, buying another property while still paying off your own might seem odd. But when done strategically, it can be the most efficient way to clear your mortgage sooner.

Here’s the logic:

1. Investment properties generate capital gains over time
   

2. You can leverage this gain, without touching your primary residence, to build equity
   

3. When the capital gains on the investment property match the remaining balance on your home loan, you can sell the investment and clear your mortgage in one shot

   
   

You can use investment properties to pay off your home loan faster

Let’s break this down with an example.

Real-World Example: Using Equity to Eliminate Your Mortgage

Let’s say a couple bought their first home 4 years ago. They’ve still got $500,000 left on the mortgage.

They then buy a $700,000 investment property, which appreciates at 5% annually. Over the next few years, that capital growth builds equity.

Using conservative assumptions and an amortisation calculator, the projections look like this:

By taking on a strategic investment, this couple could save 15 years and 10 months of payments and over $220k of interest costs.

Is This Strategy Right for Everyone?

Not necessarily. It depends on your stage of life and risk appetite.

• For those nearing retirement, this is a fantastic way to go into retirement debt-free, even if it means liquidating the investment to do so
  

• For younger investors, the smarter play might be to hold onto the investment, let it appreciate further, and build a larger portfolio, deferring the mortgage payoff to a later, more strategic point
  

In either case, investment property becomes more than a wealth builder; it becomes a mortgage-killer.

Important Considerations

Before you run out and buy an investment property to knock out your mortgage, there are a few caveats:

• Property values can fluctuate, so always use conservative growth estimates
  

• You’ll need to factor in tax, selling costs, and bank serviceability rules
  

• This strategy relies on having a good timeframe (at least 5–10 years) to allow capital gains to accrue
  

And finally, the numbers must stack up. Not every property will give you the gains you need. It takes a careful eye, sound advice, and a clear strategy.

Final Thought: Be Proactive, Not Passive

Owning your home outright is a massive achievement, but that doesn’t mean you have to wait 30 years and donate a small fortune to the bank in the process.

Use the system to your advantage. Property investment, when done right, can be a tool, not just for growing wealth, but for reclaiming your freedom years (or even decades) earlier than most.

So don’t just ask, “How can I pay this off slowly and safely?” Ask instead: “What’s the fastest, smartest path to owning my home free and clear?”

You might find the answer in the very market you thought was out of reach.

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How Can We Help You?

We help Kiwis build wealth through property investment. Our advisors will take the time to understand your individual needs and recommend suitable investment properties to help you build wealth and set up your retirement.

What Does This Look Like?

We use a 3-step process:

1. We start with a Discovery Meeting where we learn about you, your goals, etc., and you learn more about us.

2. This is followed by a Strategy Meeting where we model your retirement plan, understand key investment concepts, and briefly touch on some investment choices.

3. Finally, an Asset Selection Meeting where we discuss investment options in more detail and make any recommended adjustments based on what we now know about you.

Who Are We Right For?

We help people make smart investment choices and set up their futures. From first-time investors to experienced investors, we can cater to a wide range of people and help set up their futures through research-based property investment.

How Much Does It Cost?

Our advice is free to you! If you choose to invest, we’re paid by the property developer. This developer-paid model allows us to provide no-obligation property investment advice in New Zealand, without charging clients directly.

What Do We Do, And What Don't We Do?

What We Do

We offer end-to-end New Zealand property investment advice, helping Kiwi investors grow wealth through smart, data-led decisions. Our focus is on quality new builds in strong locations, tailored to your goals, guided by a team that knows the NZ market inside out.What We Don’t Do

We don’t do KiwiSaver, shares, cryptocurrency, or broad financial planning. Thrive is not a generalist firm. We specialise in property investment in New Zealand because that’s where we deliver the most value. By staying focused, we cut through the noise and help our clients make confident, well-informed property investment decisions.

How Do I Start?

Start the process now by booking a time to talk with our advisor by clicking here.