The Game Changer For Property Investors

ANZ recently launched something that’s turning heads among property investors, a 10 year interest only mortgage option right from day one.

This doubles the typical five year interest only period that most lenders offer. The change is reshaping how investors structure their debt, cash flow, and long term plans.

Experienced investor Peter Ambrose (in Wellington) puts it plainly:

Let’s break down what this means, the pros, the trade-offs, and how you might use this tool wisely.

What Is an Interest Only Mortgage?

With a standard mortgage, every month your repayments include part of the principal (the amount you borrowed) plus interest. An “interest only” loan means you pay only the interest portion for a set period so you aren’t required to chip away at the principal during that time.

Why a 10-Year Term Is Significant

Most banks in New Zealand offer interest only for up to five years (for investment properties).

ANZ’s new offer stretches that to ten years.

That’s a significant extension of what you can do with cash flow, giving you more flexibility to manage your portfolio, especially in early years when expenses or vacancies bite.

In return, over the full life of the loan you will pay more interest (since the principal stays higher for longer). That’s a trade-off that can be worth taking to achieve better leverage, flexibility and breathing room now.

Key Benefits for Property Investors

Here’s why this product is attractive (with the caveat that it’s not right for everyone):

1. Improved Cash Flow
   

One of the biggest challenges in property investing is managing costs like maintenance, insurance, rates, and sometimes vacant periods. Paying only interest means your monthly burden is lower. You free up cash you can use for paying down your own home loan, or investing elsewhere. Ambrose says this option gives him more breathing space, and “helps you think straight” when decisions get tough.

2. More Predictability & Stability
   

If you know you can keep repayments relatively low and stable for ten years, it helps with planning. That long interest only horizon gives you some clarity on what costs you’ll face, so you can map out your property growth strategy with less stress.

3. Strategic Debt Management
   

Some investors use interest only periods like a lever: they direct extra income toward debt reduction during good years, but when things are tight they can scale back to just interest. It adds optionality.

4. Appealing for Long-Term Investors
   

ANZ’s own team notes that many property investors are in the game for the long haul, and a 10 year interest only term supports that mindset. You don’t have to rush principal pay down; you can focus on capital growth, rent increases, or portfolio expansion.

What to Watch Out For

No offer is a free lunch. Before you commit, you need to be clear headed about the downsides:

1. You’ll pay more interest overall.
   

Because the principal isn’t reducing during those ten years, the interest portion will be more than if you were repaying principal.

2. Risk of payment shock later.
   

Once the 10 year interest only period ends, you’ll need to start repaying principal too. If you’re not prepared, repayments could jump although rents will have increased significantly over that time.

3. Discipline is essential.
   

If you don’t have a plan to reduce the debt eventually, you could end up stuck with underwhelming returns.

4. Lender criteria and risk.
   

ANZ will still apply lending conditions, deposit requirements, and assessments to make sure you can handle the loan responsibly.

Strategic Use Cases

Here are a few ways an interest only term like this could be useful:

• You’re scaling a portfolio and want to manage cash flow across multiple properties, especially in variable rent markets.

• You want a buffer for times of vacancy, repairs, or short rental downturns.

• You expect rental growth or capital gains to pick up, and you want flexibility now to capture future upside.

• You’re renovating or upgrading a property and want lower payments while the work is done.

For example, if you're focusing on investment opportunities in Auckland, Tauranga, or Queenstown, this tool gives you more room to manoeuvre without feeling overleveraged in the early years. You might be better able to handle a delayed tenancy or invest in cosmetic upgrades that push up rent or sale value.

Staircase’s Take: Use It, But Smartly

We see this ANZ product as a powerful tool, not a silver bullet. It rewards investors with foresight, discipline, and planning.

Here’s how Staircase can help you use it wisely:

1. Fit for your plans

We’ll run the numbers to see whether a 10 year interest only term actually boosts your return compared with a more traditional structure in your situation.

2. Tailored structure

We can help you layer debt strategies across your portfolio, mixing interest only and principal repaying loans depending on your goals.

3. Risk management and exit planning

We’ll help you avoid nasty surprises when your interest only period ends by building in reserves, forecasting repayment jumps, and adapting your strategy over time.

4. Location insight

While this product works nationally, some submarkets are more forgiving of cash flow risk. We’ll guide you on where the rent growth, capital return, and tenant demand give you more safety.

Final Thoughts

The 10 year interest only facility is a bold and useful shift in New Zealand’s mortgages for investors. It offers more flexibility, lower short term burden, and breathing room but only if used with intentional focus and planning. For the right investor, it could be a game changer in 2025 and beyond.

If you’d like us to run a scenario for your portfolio using this product, or to show whether it's a fit for your next investment, let’s talk. Staircase is ready to help you assess, structure, and execute so you can make the most of what this new option offers.

Frequently Asked Questions