Mortgage Adviser – Interest Rates in NEW – What you need to know.

IntroductionAs a homeowner in New Zealand, you may find yourself considering mortgage refinancing as a way to save money, adjust to changing circumstances, or take advantage of better interest rates. Refinancing, also known as remortgaging, involves replacing your current home loan with a new one that offers different terms and conditions. In this comprehensive guide, we will explore the ins and outs of mortgage refinancing in New Zealand, including the reasons to refinance, the steps involved, and the costs associated with the process.

‍Why Refinance Your Mortgage?

Refinancing your mortgage can be a smart financial move for a variety of reasons. One of the primary motivations is to secure a lower interest rate, which can significantly reduce your monthly repayments and save you thousands of dollars in interest over the life of your loan. Additionally, refinancing allows you to adjust the term of your mortgage, potentially enabling you to pay off your loan more quickly.

Other common reasons for refinancing include:

  1. Changing Circumstances: If your financial situation has changed due to factors such as a new job, increased income, or a growing family, refinancing can help you better align your mortgage with your current needs.
  2. Access to Equity: If your property has increased in value since you first took out your mortgage, refinancing can provide an opportunity to access the equity and use it for home improvements, debt consolidation, or other financial goals.
  3. Consolidating Debt: Refinancing can be a way to consolidate high-interest debt, such as credit card balances or personal loans, into your mortgage, which typically offers a lower interest rate.
  4. Taking Advantage of Incentives: Many lenders offer cash incentives or rewards for switching to their mortgage products. By refinancing, you may be able to take advantage of these offers and potentially save even more money.

‍The Steps to Refinancing Your Mortgage

Refinancing your mortgage involves several important steps. By following these steps, you can ensure a smooth and successful refinancing process:

  1. Evaluate Your Options: Start by shopping around and comparing mortgage rates from different lenders. Websites like and provide comprehensive rate comparisons, allowing you to find the best deals available in New Zealand.
  2. Assess Break Fees: If you have a fixed-rate mortgage and are considering breaking your contract, reach out to your current lender and ask for an email detailing the break fee. This fee covers the costs associated with ending your existing mortgage agreement.
  3. Calculate the Savings: Use online mortgage calculators, such as Sorted’s mortgage calculator, to estimate how much you could save by refinancing. These calculators consider factors such as interest rates, loan terms, and repayment amounts, allowing you to determine the potential benefits of refinancing.
  4. Consult with Professionals: Seek guidance from your bank and consider working with a mortgage broker to explore all your refinancing options. They can provide expert advice tailored to your specific circumstances and help you find the best loan for your needs.
  5. Apply and Qualify: Once you’ve decided on a new mortgage, gather the necessary documents, such as proof of income, employment details, and asset information. Submit your application and undergo the qualification process, which may include a credit check and property valuation.
  6. Review Costs and Fees: Understand the costs involved in refinancing, including solicitor fees, valuation fees, application fees, and potential repayment of any cash incentives received from your current lender. Compare these costs against the potential savings to ensure the overall financial benefit of refinancing.
  7. Negotiate with Lenders: Don’t be afraid to negotiate with your current lender or potential new lenders. They may be willing to offer better terms or incentives to secure your business. Remember, it’s essential to consider the long-term benefits and weigh them against the upfront costs.
  8. Finalize the Refinancing Process: Once you’ve chosen a lender and received approval, work with your solicitor to complete the necessary paperwork and finalize the refinancing. Be sure to update any automatic payments or direct debits to reflect the changes in your mortgage.

‍Costs Associated with Refinancing

While refinancing can offer significant financial benefits, it’s important to consider the costs involved. These costs can vary depending on your circumstances and the specific terms of your mortgage. Here are some common costs associated with refinancing:

  1. Break Fees: If you have a fixed-rate mortgage and choose to break your contract, your current lender may charge a break fee to cover their losses. These fees can vary but are typically calculated based on the remaining term and the interest rate differential.
  2. Legal Fees: You will need to engage a solicitor to handle the legal aspects of refinancing, including changing the mortgage documentation. Legal fees can vary, so it’s advisable to shop around for the best rates.
  3. Valuation Fees: Some lenders may require a registered property valuation to determine the current market value of your home. Valuation fees typically range from $500 onwards, depending on the complexity of the valuation.
  4. Repayment of Incentives: If you received any cash incentives or rewards when you initially took out your mortgage, your current lender may require you to repay or return them when refinancing. Be sure to review the terms of your original agreement to understand any obligations.
  5. Application Fees: When applying for a new mortgage, the new lender may charge an application fee to cover administrative costs. These fees can vary, so it’s worth comparing different lenders to find the most competitive rates.

‍When is the Best Time to Refinance?

The ideal time to refinance your mortgage depends on your individual circumstances and the prevailing market conditions. Here are a few factors to consider when determining whether to refinance:

  1. Interest Rate Trends: Keep an eye on interest rate movements. If rates are currently low or expected to decrease, it may be an opportune time to refinance and lock in a more favorable rate.
  2. Change in Financial Situation: If your income has increased, you’ve received a windfall, or your expenses have decreased, refinancing can help you take advantage of your improved financial position.
  3. End of Fixed-Rate Term: If your fixed-rate term is coming to an end, it’s a good time to explore refinancing options. By refinancing before your term expires, you can potentially secure a better rate and avoid automatically rolling over to a higher rate.
  4. Need for Additional Funds: If you require funds for home renovations, debt consolidation, or other purposes, refinancing can provide a means to access the equity in your property and obtain a lump sum.
  5. Long-Term Financial Planning: If you’re looking to pay off your mortgage faster or reduce your monthly repayments, refinancing can help you restructure your loan to align with your long-term financial goals.

‍The Role of Mortgage Brokers in Refinancing

Mortgage brokers play a crucial role in the refinancing process. They have access to a wide range of lenders and can help you navigate the complex mortgage landscape to find the best deal for your needs. Here are some key benefits of working with a mortgage broker:

  1. Access to Multiple Lenders: Mortgage brokers have relationships with various lenders, allowing them to provide you with a comprehensive range of options. They can compare rates, terms, and incentives from different lenders, ultimately helping you secure the best possible refinancing deal.
  2. Expert Advice and Guidance: Mortgage brokers are experienced professionals who understand the intricacies of the mortgage market. They can provide valuable advice tailored to your specific situation, helping you make informed decisions.
  3. Negotiation and Advocacy: Mortgage brokers act as your advocate during the refinancing process. They can negotiate with lenders on your behalf, ensuring you receive the most favorable terms and conditions.
  4. Time and Cost Savings: By working with a mortgage broker, you save time and effort by having them handle the research, paperwork, and negotiations. They can streamline the refinancing process, allowing you to focus on other aspects of your life.
  5. Continued Support: Mortgage brokers provide ongoing support even after your refinancing is complete. They can assist with any future mortgage-related queries or refinancing needs you may have.

‍Finding a Mortgage Broker in New Zealand

If you’re considering refinancing your mortgage, finding a reliable and trustworthy mortgage broker is essential. Here are some ways to find a reputable mortgage broker in New Zealand:

  1. Personal Recommendations: Ask friends, family, or colleagues who have recently refinanced their mortgages for recommendations. Personal referrals can provide valuable insights into the quality and professionalism of a mortgage broker.
  2. Online Directories: Utilize online directories, such as the Registered Financial Advisers list on the Companies Office website, to find authorized financial advisers specializing in mortgages. These directories provide information about their expertise and the financial services they offer.
  3. Professional Associations: Look for mortgage brokers who are members of professional associations, such as the New Zealand Mortgage Brokers Association (NZMBA). Membership in these associations indicates a commitment to professionalism and adherence to industry standards.
  4. Online Reviews and Testimonials: Read online reviews and testimonials from previous clients to gauge the reputation and customer satisfaction of potential mortgage brokers. Websites like Google, Facebook, and independent review platforms can provide helpful insights.
mortgage broker advantages


Mortgage refinancing can be a powerful tool for New Zealand homeowners to save money, adapt to changing circumstances, and achieve their long-term financial goals. By understanding the reasons to refinance, the steps involved, and the costs associated with the process, you can make informed decisions and secure the best possible refinancing deal. Whether you choose to work with your current lender or explore options with different lenders, consider partnering with a mortgage broker to guide you through the refinancing journey. With their expertise and access to multiple lenders, a mortgage broker can help you navigate the complexities of refinancing and ensure a successful outcome.

If you’re in New Zealand and in need of mortgage assistance, find a local mortgage adviser here.


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