Almost every mortgage in New Zealand is on a fixed rate, and almost every one of them rolls off eventually. What happens next is usually decided in about ninety seconds: the bank sends a letter with a new rate on it, you tick a box, and that is your next two or three years settled.
That ninety seconds is worth more than most people realise. Here is how to use it.
Six weeks out: find out what you're actually on
You need three things, and your internet banking will have all of them: your current rate, the exact date it expires, and your remaining loan balance. While you are there, check whether you took a cash contribution when you set the loan up. Those usually come with a clawback period, commonly three or four years, and if you are still inside it then moving lenders means paying some of that money back. It does not necessarily stop you moving. It just belongs in the maths.
Four weeks out: get the market tested
This is the part that gets skipped. Your bank's offer is one number from one lender, and it is rarely their best one, because the rate that appears on the letter is usually the carded rate rather than the rate they would agree to if someone pushed.
A broker will put your position in front of more than twenty lenders and come back with what the rest of the market would do. Sometimes the answer is that your existing bank is competitive and you should stay put and simply negotiate. That is a perfectly good outcome, and worth knowing rather than guessing.
Two weeks out: decide on structure, not just rate
Rate gets all the attention, and structure quietly matters more. A few questions worth asking before you sign anything:
- Should the whole loan go on one term? Splitting across two or three fixed terms means you are never re-fixing the entire mortgage into a single moment in the market.
- Do you want to make lump sum repayments? Fixed rates limit how much extra you can pay without a break fee. A small floating or revolving portion solves that.
- Has your life changed since you last fixed? New income, a baby, a renovation, a car loan cleared. Any of those can change what the right structure looks like.
The week it expires
By now it should already be done. If nothing is actioned, most loans roll onto the lender's floating rate, which is almost always higher than anything you would have agreed deliberately. It is not a disaster for a few weeks, but it is money leaving for no reason.
The short version
- Start six weeks out, not the week it expires
- Check for a cash contribution clawback before you assume you can move
- Get the market tested even if you intend to stay — it is what gives you something to negotiate with
- Spend as much thought on structure as you do on the rate
If yours is coming up in the next six months, that is the moment to have the conversation. More on how we approach it on our refinancing page, or run your numbers through the repayment calculator first.