Refinancing Your Mortgage: The Complete Guide

Know the signs it's worth reviewing your mortgage

Refinancing isn't something you need to think about constantly, but a handful of signs make it genuinely worth a proper look: your current rate sits above around 5.5%, you're coming up on the end of a fixed term, or it's simply been over two years since anyone actually reviewed your mortgage against what's currently available.

None of these guarantee refinancing makes sense for you specifically, that depends on your break fees and the real numbers, but they're a reasonable trigger to get it checked properly.

Check your break fees before you commit to anything

If you're currently on a fixed rate and want to switch before that term ends, your bank will typically charge a break fee to exit early. This can range from a few hundred dollars to several thousand, depending on how much time is left on your fixed term and how rates have moved since you fixed.

Weigh a rate cut against a cashback offer

Several major NZ banks offer cashback, typically in the $2,000-$5,000 range, to attract refinancers, alongside minimum loan-size requirements. Whether a straight rate cut or a cashback deal works out better for you depends on your loan size, how long you're likely to stay with that lender, and what else is bundled into the offer.

• A lower rate compounds over the life of the loan, the bigger the mortgage, the more a small rate difference is worth.
• Cashback is a one-off amount, useful for covering legal fees or other moving costs, but usually comes with a clawback period (commonly around 24-27 months) if you refinance away again too soon.

Jagdip compares both against your actual loan size across 20+ lenders, rather than picking whichever headline number looks best.

Know what a lender will reassess this time

Refinancing means a fresh application, not just a rate swap, so a new lender reassesses your situation as it stands today, not when you first got your mortgage. That includes your current income, any new debt (car loans, credit card limits, buy-now-pay-later), and your recent spending patterns from bank statements.

If your circumstances have changed since your original mortgage, worth flagging that upfront rather than assuming approval is automatic.

Time it around your fixed-term expiry

If you're currently on a fixed rate, the cleanest time to refinance is right as that term ends, avoiding a break fee altogether. Most lenders let you lock in a new rate a few weeks ahead of your existing term expiring, so it's worth starting the conversation before your renewal notice actually arrives, not after.