- House prices and mortgage rates fell in 2025, but household costs rose significantly, exceeding $7000 monthly.
- Tom Hartmann advises using Sorted.org.nz’s budget planner to pay down mortgages faster and reduce interest.
- Frances Cook suggests reviewing and negotiating regular bills, and using apps like Grocer to compare food prices.
House prices and mortgage rates fell in 2025, but the cost of running a household ballooned.
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The squeeze on finances put the brakes on spending, with insurance, food, energy, and transport bills – to name a few – running above $7000 a month for many Kiwis.
OneRoof asked finance experts what struggling households can do to bring down their bills and how they can get out of the debt trap faster.
Sorted.org.nz personal finance lead Tom Hartmann says the average household with a $600,000 mortgage will spend $1585 a fortnight servicing that loan over 25 years on a 4.79% interest rate. An extra $385 a fortnight would mean paying the loan off in 17 years instead of 25, which is why budgeting is so crucial, he says.
Upping your fortnightly payments can take years off your mortgage debt. Photo / Alex Burton
“The reality is, every dollar that you put more in, it restructures the mortgage in your favour. So if you can do this, it makes a marked difference in how quickly you finish,” he says.
Hartmann says the budget planner on Sorted.org.nz, which is run by the Retirement Commission, gives each dollar in the household “a job to do”.
The goal is to find spare money to pay down the mortgage faster, reducing the amount of interest paid over the life of the loan. “We try to promote more long-term thinking because it’s easy to do the short-term stuff, but essentially our budget planner is really for funnelling as much money toward the things that are most important to you.”
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Hartmann says what is most important to people largely falls into five categories of spending: experiences, people, security, material things and growing wealth.
For many Kiwis, security is about building savings, he says. “For example, they might be building an emergency fund.” That could range from $1000 to a three-month buffer of expenses in case of redundancy.
Other security plays include buying a home, or improving it, a safer car, a career change, or funding retirement through really aggressive saving.
An experience might be travel, an OE, a career break, or simply participating in community events, and even retirement in the sense it could be more about lifestyle or retiring early.
Financial journalist Frances Cook: “Insurance, rates, and some utilities charge more if you pay monthly. Paying annually avoids those admin fees. Photo / Dean Purcell
Growing wealth was about paying off high-interest debt or student loans, starting a business, lifting KiwiSaver contributions, investing beyond KiwiSaver, buying investment property, or aiming to fully fund retirement long-term.
Wealth isn’t necessarily about becoming rich, Hartmann says, but rather about specific goals.
Hartmann says Sorted’s mortgage calculator and budget planner are its most popular tools, and it is not uncommon for 10,000 people to access the mortgage calculator after an interest rate change.
Frances Cook, financial journalist and host of the Making Cents podcast, offered OneRoof some hacks for getting the bills down. “You start with any regular bills. Print out your bank statement for the last month, have a look through there," she says.
“First of all, check for any subscriptions ... because we forget we have them.” Cut any that aren’t being used, Cook says.
Sorting through your subscriptions and cancelling services you don’t use can help bring down the bills. Photo / Getty Images
Next, scrutinise every bill – power, insurance, streaming services, mobile phone costs etc. “For anything that you pay regularly, ask, ‘What version of this could I get for a lower price?’.”
Cook recommends powerswitch.org.nz to compare power costs. “Pick one bill per week, so that it’s not overwhelming, and compare prices on that bill and then call up your current provider and say, ‘Hey, I’ve been a really loyal customer for this many years, I see that this company is offering this price – can you match it?’ And if they can’t, then switch. But often you can stay where you are, just by asking them to match it.”
Being smarter about how you pay your bills also helps. “Insurance, rates, and some utilities charge more if you pay monthly. Paying annually avoids those admin fees.”
Cook says food is a tough cost to reduce. For example, the cost of mince was up 13% in 2025 along with butter (up 51.2% in 12 months), and cheese rocketed up 30.1%.
“Food is horrendous. There’s a fantastic app called Grocer, and it lets you compare prices for your regular food buys across different shops in your area.”
Going individually to a fruit and vegetable store, butcher, Asian grocer and so on is often cheaper than shopping at a supermarket, Cook says.
But if those stores are not in the same place, it could be just as expensive, not to mention time-consuming. “So what you want to do is split up those shops and hit up each one maybe on your way back from work across the week. And then it’s not adding to your petrol bill.”
Dr Lucy Telfar Barnard, University of Otago senior research fellow in the housing and health research programme, says one bill that households struggle with is electricity because they vary so much.
She recommends people have good insulation, good draft stops, and run heat pumps continuously during winter to maintain an even temperature rather than regularly heating a room from freezing.
These methods would not only help keep energy bills down but also prevent damp inside the house.
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