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Refinance mortgages

Refinancing your home loan can save you thousands each year over the life of your mortgage. Plus, switching is easier than you think.

Name Product Standard Rates From Special Rates From Loan Terms Available Application Fee
ANZ Fixed Rate Home Loan
4.25%
3.65%
6 months to 5 years
$500
ASB Fixed Rate Home Loan
3.65%
N/A
6 months to 5 years
$150 - $400
The Co-operative Bank Fixed Rate Home Loan
4.15%
3.65%
6 months to 5 years
$260
HSBC Fixed Rate Home Loan
3.49%
N/A
6 months to 5 years
$250
Kiwibank Fixed Rate Home Loan
4.54%
3.69%
6 months to 5 years
N/A
Resimac Fixed Rate Home Loan
4.24%
N/A
1 to 5 years
$399
Interest rate depends on available equity, term length and credit status.
SBS Fixed Rate Home Loan
3.95%
3.45%
6 months to 5 years
$250
TSB Fixed Rate Home Loan
4.40%
3.60%
6 months to 5 years
N/A
Westpac Fixed Rate Home Loan
4.29%
3.69%
6 months to 5 years
$140
ANZ Floating Rate Home Loan
4.79%
N/A
N/A
$500
ASB Floating Rate Home Loan
4.60%
N/A
N/A
$150 - $400
The Co-operative Bank Floating Rate Home Loan
4.75%
4.75%
N/A
$260
HSBC Floating Rate Home Loan
4.59%
N/A
N/A
$250
Kiwibank Floating Rate Home Loan
4.25%
4.25%
N/A
N/A
Resimac Floating Rate Home Loan
3.89%
N/A
N/A
$399
Interest rate depends on available equity.
SBS Floating Rate Home Loan
4.79%
N/A
N/A
$250
TSB Floating Rate Home Loan
5.59%
4.79%
N/A
N/A
Westpac Floating Rate Home Loan
5.09%
N/A
N/A
$140
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Compare up to 4 providers

Refinancing means changing from one mortgage to another. You can switch mortgages with your current lender or get a different product with a new provider.

The primary purpose of refinancing is typically to get a lower rate and save thousands in interest payments. You can also switch to a mortgage with more features or move from a property investment mortgage to an owner-occupier mortgage. Some borrowers refinance to unlock equity in their property, switch to a more suitable mortgage type or access features like an offset account.

Why should I refinance?

Refinancing to a lower interest rate reduces your monthly mortgage repayments. Even a slight decrease in monthly repayments can add up to thousands of dollars over the length of a mortgage. However, there are far more benefits than simple savings. You should look at switching mortgages to:

  • Secure a lower interest rate. The lower your rate, the lower your repayments. Rates in New Zealand are very competitive right now, so you could find yourself a better one. If you haven’t looked at your mortgage in a few years, you might be surprised to learn how much you’re paying. Compare rates and see how much you could save.
  • Unlock more features. Features like additional repayments, a redraw facility, portability and offset accounts can help you save on interest repayments. They give you more flexibility and let you get more from your mortgage.
  • Unlock equity. The amount of your property you own is called equity. You can access the equity through a line of credit mortgage to purchase another property, renovate your home or buy a car. Refinancing in this way can save you money on other purchases (for example, a mortgage typically has a lower rate than a car loan) but adding to your mortgage means you’re repaying for a longer period.
  • Consolidate your debts. Juggling debts can be challenging. Debt consolidation lets you roll your existing debts into a single manageable loan. If done correctly, you can save on fees and reduce the amount of interest payable by combining your debt into a single repayment with a competitive rate. It’s essential to work closely with your lender during this period to ensure that you save money in the process. However, paying off a smaller debt over decades by adding it to your mortgage can end up costing you more in interest over time.

Examples: the benefits of switching to a better mortgage

Bryan changes to a lower rate

Close-up photo of a thoughtful young man.Bryan is four years into a 30-year mortgage. It’s an owner-occupier, principal and interest loan that started with a low 3-year fixed rate. However, the fixed-rate period has finished, and the current rate is much higher, at 4.34%. Bryan initially borrowed $700,000 and has repaid $120,000 so far.

  • Current monthly repayment: $3,104 per month.

Bryan jumps online and starts comparing mortgages. He doesn’t care about premium features like offset accounts but wants a flexible mortgage that offers a low rate. Finally, Bryan finds a good, basic mortgage product with a variable rate of 3.62%. However, the mortgage does come with a $500 application fee, and his old loan has a $200 discharge fee.

  • Switching costs: $700.
  • New monthly repayment: $2,871 per month.

Even with the cost of switching factored in, Bryan still comes out ahead. By changing mortgages, he saves $233 a month in repayments. That’s $2,796 a year.

Leah wants more features

A woman smiling at the camera.After making six years of repayments on an $800,000 mortgage, Leah decides she wants more out of her loan. She has a package mortgage with her bank and has bundled her mortgage with a credit card and savings account. However, the rate is high (4.12%), and the package no longer suits her needs. Plus, she hardly uses her credit card.

Leah compares her options and finds a variable mortgage with a 3.75% interest rate and a 100% offset account. She wants to use some savings and offset them against her mortgage to lower her interest and pay off the loan faster.

  • Savings: Leah’s new rate is saving her over $100 a month.
  • Offset benefits: Leah can shave a year off her mortgage by putting $30,000 of savings into her offset account.

Arabella taps into her home equity

Woman with shoulder-length hair smiling.Arabella wants to invest in property. She has almost paid off her mortgage and has $750,000 in equity. Because Arabella doesn’t have much debt to repay on her mortgage, she can easily switch to a line of credit loan. Arabella can then access cash as a deposit on a small investment property, which can be a risky investment strategy if she borrows too much money.

However, because Arabella doesn’t have much debt and her income is steady, her risk is lower. She’s also planning to use her investment property as a source of income, further minimising her risks.

  • Benefits: Arabella can purchase an investment property faster and generate rental income.

How to refinance a mortgage

A man at a desk doing paperwork.

Switching is easier than you think. First, you need to compare, find a better mortgage and then apply for it like any other loan. Here are the steps involved in refinancing your mortgage:

🔎 Check your interest rate. Look at competitive mortgage rates and see if yours is too high.

📞 Speak to your current lender and ask for a lower rate. Ask for a lower rate; if your lender agrees, you can start saving money immediately without refinancing.

📊 Compare mortgage options. If you decide to switch lenders, look for a mortgage with a better rate and the features you need. Make sure it’s a loan type that matches your situation.

🧮 Crunch the numbers. Examine the costs of your new mortgage, including application and ongoing fees and make sure the new loan is a better deal. Check your exit costs from your current mortgage, too (there may be a discharge fee or break costs).

📝 Apply for a new mortgage. Collect your mortgage documents, submit your application and then wait for approval from the new lender.

🏃‍♀️ Exit your current mortgage. Notify your current lender and discharge your mortgage. Your new and current lender takes care of the rest.

Refinancing is quite a straightforward process, although it requires quite a lot of paperwork to submit a mortgage application. If your situation is complicated or unusual, you may want expert refinancing guidance so reach out to a mortgage broker.

🔥 Hot tip: Save more by refinancing your mortgage but keeping repayments the same

Refinancing to a mortgage with a lower rate saves you money every month, because your repayments are lower. However, you can save yourself even more money in the long run by switching to a lower rate and keeping your repayments the same as they were before.

This way, you’re making extra repayments every month because you’re paying off slightly more than you need. So you’re paying the same as before, but it’s paying off your principal faster.

If your new mortgage has an offset account, you can simply save the extra money there. In this way, it functions just like an additional repayment.

There are other benefits to refinancing than saving money

  • More mortgage features. Borrowers may switch to a mortgage because it has features like additional repayments, a redraw facility, portability or offset accounts. These features can help you save on interest repayments or give you more flexibility.
  • Unlock your equity. If you’ve repaid a substantial amount of your mortgage then this is equity. You can borrow this equity using a line of credit or by refinancing and borrowing more money.
  • Consolidate debt. You can refinance multiple debts into your mortgage and pay it off with a single interest rate, which can help because a mortgage rate is lower than a car or personal loan rate. However, paying off a smaller debt over decades by adding it to your mortgage can end up costing you more in interest over time.

How much does refinancing cost?

Changing mortgages can come with upfront costs for starting a new loan and exiting your old mortgage. Fees are usually the most significant expense. You should always factor these costs into your decision, but don’t let a single upfront cost deter you from making a substantial saving in the long term.

Fees related to switching mortgages include:

  • Upfront fees for your new loan.Some lenders chargeapplication or settlement fees,while others don’t.
  • Valuation fees.Your new lender will value your property during the application and may charge a fee for it.
  • Early terminations fees. Lenders often charge a fee to end a mortgage, whether by refinancing or repaying the loan.
  • Fixed-rate break costs.If your current mortgage has a fixed interest rate, you can face higher charges for breaking the loan. If this cost is too high, you should wait until the fixed period ends before refinancing.
  • Ongoing fees. For your new mortgage.

    Are there situations where I shouldn’t refinance my mortgage?

    For most borrowers refinancing is a good idea. However, sometimes switching mortgages isn’t worth it. Here are a few cases where you’re probably better off sticking with your current loan:

    • You have a fixed-rate mortgage with a very high exit cost, and the cost of fees could outweigh the benefits of changing until the fixed-rate period is over. First, check with your current lender for a better idea of your break costs (it’s hard to calculate on your own).
    • You think you’ll probably sell your property in the near future and you won’t have the mortgage long enough to make any decent savings.
    • Your mortgage amount is small. In this case, the savings you get by switching might not be worth the interest you pay.
    • You’ve been with a lender for quite some time, enjoy the service you receive and have other products with them such as credit cards or a personal loan. Therefore, you might be better off asking your lender for a discount.
    • Your property’s value determines your equity. For example, it’s hard to refinance if you own 20% of a property you paid $700,000 for if that property is now only worth $650,000. While this is a relatively rare scenario, properties can lose value; it sometimes happens because the property is damaged or the local property market declines. In this situation, you need to get a professional valuation and make sure you have enough equity to refinance.
    • Your property value has fallen, or your LVR is still over 80%, which could see you pay lenders mortgage insurance again.

    I have some more questions about refinancing

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