Your borrowing power will vary between banks and lenders because they use different methods to assess your capacity and have different lending criteria.

General, these are some key criteria

• Credit card limits

• Income and types of income (e.g. casual, contract, full-time)

• The size of the loan compared to the property value

• Number of dependents and their situation

• Type of loan

• Living expenses

• Existing asset position (including the size of the deposit)

Interest rates can change regularly or stay steady, depending on the economy at the time.

Choosing a fixed or variable interest rate home loan can help you reduce interest charges over the life of your home loan.

It is useful to check from time to time if you are better off with a fixed interest rate for your home loan, a variable interest rate home loan, or a combination of both.

A variable interest rate home loan is affected by economic conditions both within New Zealand and around the world, so you can expect your home loan repayments to rise and fall over the term of your loan.

A fixed home loan rate provides you with the assurance of a set home loan repayment amount for a pre-determined period of time.

The best solution for managing mortgage stress is to put in place strategies to avoid it altogether. Two key areas that can help you manage your mortgage and prevent mortgage stress are: (1) sit down and create a good budget based on your current financial situation and goals; and (2) try to build a ‘buffer’ into your home loan by making additional repayments whenever possible.

However, if you are already experiencing mortgage stress, or believe you will soon have trouble making the home loan repayments, you should talk to your mortgage adviser straight away. Some possible options would be:

• apply for a hardship variation to extend your loan term, take a repayment holiday, or both

• consolidate debt

• refinance the home load

• switch to an interest only repayment option

Good mortgage management can help you save both time and money on your home loan, and also avoid or manage mortgage stress when things don’t go quite as planned.

Here are our top strategies for managing your mortgage and paying off your loan faster.

• pay off the home load sooner

• beating mortgage stress

• hardship variations and mortgage repayment holidays

• consolidate debt

• refinancing