How to Help Your Adult Kids Avoid a 25-Year Mortgage Trap

A practical insight into one of life’s most important financial windows

There’s no denying it—home ownership feels out of reach for many young people today. Sky-high property prices, rising interest rates, and the cost of living don’t leave a lot of room for saving a deposit. But there’s also a lesser-talked-about opportunity that, with the right encouragement and planning, can make a huge difference.

It’s a window of time spanning roughly from age 22 to 32. For many, it’s a decade of freedom: before children, before major commitments, and full of potential to travel, work, and save. It’s also a financial sweet spot that can set them up for a much smaller mortgage—or even none at all—later in life.

An OE with Purpose

Whether your adult children want to head off on an overseas adventure or stay closer to home, these years can be pivotal. Overseas experience doesn’t just build life skills—it can also offer big financial benefits. Many roles abroad offer higher wages, stronger currencies, free accommodation, or even tax-free income. It’s not uncommon for Kiwis to return from a few years away with a substantial deposit saved.

Encouraging them to look at job opportunities offshore—especially those with good pay and low living costs—can make a lasting impact. From hospitality in resorts to teaching English, cruise ship work, tech gigs, and more, there are countless ways to earn and save well in their twenties.

The Power of a Bigger Deposit

Let’s put this into numbers:

A couple buys a $780,000 home at age 32.

• Couple 1 stayed in New Zealand and saved a $130,000 deposit. They borrow $650,000 and take out a 25-year mortgage at 5.5%.
  Monthly repayments: $3,991
  Total interest paid over the life of the loan: $547,300

• Couple 2 worked offshore and saved a $230,000 deposit. They borrow $550,000 over 15 years at 5.5%.
  Monthly repayments: $4,503
  Total interest paid: $260,500

After 15 years, Couple 2 are mortgage-free. If they then continue saving the same $4,500/month into a simple investment earning 5%, they’d have over $730,000 saved by the time Couple 1 finally clears their loan.

That’s the difference a few extra years of focused earning and saving in their twenties can make.

The Power of KiwiSaver

If Couple 1 has been contributing to their KiwiSaver accounts, they might have the opportunity to withdraw some of those savings to help with their home deposit. After just three years of contributions, KiwiSaver members can withdraw the balance (apart from the government contributions) to assist with buying their first home.

Let’s say, over the years, they’ve saved $30,000 in their KiwiSaver accounts. This could contribute to their deposit, reducing the amount they need to save themselves by $30,000.

Additionally, through the First Home Grant, they may be able to access up to $10,000 as a couple to further reduce their deposit requirements.

This means their $130,000 deposit would now only need to be $90,000. By reducing their deposit, they would lower the mortgage they need to take out and ultimately pay less in interest over time.

Staying Put? Still Options.

If working overseas isn’t the right fit, there are still clever ways for young people to improve their financial outlook at home:

• Living rent-free: If your child is working locally and you’re in a position to help, a rent-free setup (even something simple like converting a garage) can fast-track their savings.

• House hacking: Buying a home with a flat or converting part of a house into a rental unit can bring in $15,000–$20,000 a year toward the mortgage.

• Flatmates: Sharing space isn’t always fun, but it can significantly reduce expenses in the early years of a mortgage.

Your Role? A Gentle Guide

You don’t need to bankroll your adult children’s futures—but you can share this kind of insight with them and encourage open conversations about long-term goals. Even a few smart decisions in their twenties can help them avoid being financially tied down well into their fifties.

Let them have their adventures—but with an eye on the bigger picture. If you’re in a position to offer guidance, contacts, or even a place to stay, it could make a world of difference.