How to refinance a mortgage in NZ: 6 steps
How to refinance a mortgage comes down to six steps: check when your fixed term ends and what a break fee would be, get your numbers, compare the total cost of switching, apply and get approval, instruct a lawyer to handle the discharge, then settle. Do it at the end of your fixed term and there’s no break fee. I’d start four to six weeks before that date. If you are still deciding whether to switch at all, start with our home loan refinance page, which has a savings estimator and covers when refinancing is and isn’t worth it.
The example is illustrative: $600,000 loan, a 0.30% lower rate and a 1% cashback. Cashbacks, fees and clawback periods vary by bank and change often, so check the current terms before you decide.
Most people never refinance because it sounds like a lot of paperwork. It isn’t, and the new lender does most of it. This post is the practical walk-through. For why people switch, the options for structure and cash, and what a review involves, see our refinance mortgage page.
Check your fixed-term end and break fee
Find the end date of each fixed portion. It’s in your banking app or your last loan statement. If you leave before that date, the bank can charge a break fee on that portion. Floating portions have no break fee.
The fee is meant to be a reasonable estimate of the bank’s loss, and it’s usually zero or small if rates have risen since you fixed. I’ve explained how it’s worked out in mortgage break fees. If the fee is big, waiting for the term to end is often the cheaper move.
Get your numbers together
You’ll need your current balance, rate and repayment, your fixed-term end dates, ID, recent payslips or accounts, and statements for any other debts. I’d also note a rough value for your home. If the new loan isn’t bigger than your current one, the RBNZ’s LVR and DTI limits don’t apply to the switch.
Compare the total cost, not just the rate
A lower rate isn’t the whole story. Add up the rate saving, any cashback, and the costs of moving: legal fees often $800 to $1,500, a valuation of $600 to $900 if the lender wants one, and a discharge fee of $0 to $300.
| Illustrative $600,000 loan | Amount |
|---|---|
| Rate saving of 0.30% a year | about $1,800 |
| Switching costs (top of the ranges above) | up to $2,700 |
| Cashback at 1% of the loan | $6,000 |
| Year-one position if cashback is kept | about $5,100 ahead |
The catch is clawback. Most banks claw cashback back if you leave within about three to four years, so you’re signing up to stay. The 1% is a round figure for the example, not a quote, and offers move around, so check the current offer. Use the guide to comparing rates for what else to look at.
I’ll run the numbers on your loan, including any break fee, and tell you honestly if staying put is the better move.
Book a free refinance check →Apply and get approval
This is where an adviser saves you time. I send the application to the lender, answer their questions and chase the approval. Your lender will check your income, expenses and credit, and may order a valuation. If you’re moving from a non-bank to a bank, expect them to want 12 to 24 months of clean repayments first.
Refinancing is also the usual way to roll other debts into the mortgage. If that’s the plan, read consolidating debt into your mortgage first, because spreading it over 25 years can cost you more.
Lawyer and discharge
Once you accept the offer, a lawyer arranges the new mortgage and asks your old bank to discharge its mortgage. Cashback often covers the legal fee. You sign documents, and the lawyer does the rest.
Settle
On settlement day the new lender pays out the old loan and your new loan starts. Set up your repayment, close anything you no longer need, and diarise your new fixed-term end date. If you’re taking cashback, note the clawback period as well.
Where to start
- Write down every fixed-term end date and your current rate.
- Ask your bank for a break fee figure, in writing.
- Get a comparison that includes cashback, costs and clawback.
- Book a chat so the application is ready ahead of the date.
For the full picture, including when switching isn’t worth it, see our refinance mortgage page, or try its savings estimator first.
Common questions
How long does it take to refinance a mortgage in NZ?
Does refinancing cost anything?
Can I refinance if I’m on a fixed rate?
Can I refinance from a non-bank lender to a bank?
Can I refinance a mortgage with a different bank?
How often can I refinance a mortgage?
Read next
Mortgage break fees
How they’re worked out and when they’re small.
Comparing home loan rates
What to look at beyond the headline rate.
Consolidating debt
A worked example of the savings and the trap.
Talk it through with Yatin. Free, no obligation, and usually one phone call.
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This article is general information only and isn’t personalised financial advice. Figures are illustrative and based on the assumptions shown. Mortgage Sense is a trading name of Yatin Kainth, a Financial Adviser (FSP1007497) providing advice under the Mortgage Managers licence (North West Group Holdings Ltd, FSP682791). See the Disclosure Statement.
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