When your fixed mortgage rate expires, you'll face one of the most impactful financial decisions in your homeownership journey: refix or refinance?
Getting this right can save you tens of thousands of dollars over the life of your loan. Getting it wrong can lock you into higher repayments or hefty break fees. Here's how to approach it clearly.
What's the Difference?
Refixing means staying with your current lender and locking in a new fixed rate — or switching to a floating rate — at the end of your current term.
Refinancing means moving your mortgage to a different lender entirely, usually to secure a better rate, access more equity, or consolidate debt.
Both options reset your mortgage terms and give you an opportunity to reassess your situation.
Why Your Refix Date Matters
Most New Zealand mortgages come off their fixed term every 1–5 years. At that point, if you do nothing, your loan automatically rolls onto a floating rate — which is almost always higher than the best fixed rates on the market.
The window around your refix date is when you have the most negotiating power. Use it.
When to Simply Refix
Refixing with your existing lender is often the path of least resistance, and sometimes the smartest move. Consider refixing if:
- Your current lender offers a competitive rate that matches the market
- You're mid-renovation and don't want the hassle of a full application process
- You've recently changed jobs and don't want to trigger a new income assessment
- Your loan-to-value ratio (LVR) is above 80%, limiting your refinancing options
- You have a small remaining balance where the cost of refinancing outweighs the savings
Tip: Don't just accept the first rate your bank offers. Ring them and ask for their retention rate — banks often hold back their most competitive rates for customers who push back.
When to Refinance to a New Lender
Refinancing takes more effort, but the rewards can be significant. Consider refinancing if:
- Another lender is offering a materially better rate (even 0.25% less matters over a 25-year loan)
- You want to restructure your loan — e.g. split it into fixed and floating portions
- You need a cash-out top-up your current lender won't approve
- You're consolidating high-interest debt (credit cards, personal loans) into your mortgage
- Your current lender has poor service or limited flexibility
What Does Refinancing Cost?
Switching isn't free. Typical costs include:
| Cost | Typical Range |
|---|---|
| Discharge fee (existing lender) | $150–$300 |
| Legal fees (new lender) | $800–$1,500 |
| Valuation (if required) | $500–$900 |
| Break fee (if leaving early) | Varies — can be thousands |
Many lenders offer cashback incentives of $1,000–$3,000 to offset these costs. Factor this into your comparison.
The Break Fee Risk
If you're considering leaving your fixed-rate mortgage before the term ends, you may face a break fee (also called an early repayment cost).
Break fees are calculated based on the difference between your original fixed rate and current wholesale rates. When wholesale rates have fallen sharply, break fees can be substantial — sometimes $5,000 to $20,000 or more.
Always ask your lender to calculate your exact break fee before committing to a switch.
How to Compare Options
When your refix date is 60–90 days away, take these steps:
- Check your current lender's refix rate — ring their retention team, not the standard rate card
- Compare at least 2–3 other lenders — or let a mortgage adviser do this for you
- Calculate the total cost including fees, cashback, and rate savings over your chosen term
- Decide on term length — consider where rates might head and how much certainty you want
How a Mortgage Adviser Helps
Comparing every lender in New Zealand is time-consuming and complex. A mortgage adviser like Nexa does this work for you — at no cost, because advisers are paid by the lender you choose.
We know which lenders are currently competitive, which cashback offers are available, and how to structure your loan to suit your goals.
Talk to Nexa about your upcoming refix →
Quick Checklist for Your Refix Date
- Diarise your refix date 90 days in advance
- Request your current lender's best retention rate
- Get a comparison from a mortgage adviser
- Factor in break fees if considering switching early
- Confirm your loan structure suits your current goals
Don't let your mortgage roll onto floating by default. A 30-minute conversation at the right time can save you years of unnecessary interest.