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Refixing Your Mortgage NZ — What to Do When Your Fixed Term Expires

Updated

When your fixed mortgage term expires, you face one of the most important financial decisions in homeownership: what happens next. Many NZ borrowers simply accept whatever rate their bank offers — often leaving thousands of dollars on the table. This guide shows you how to handle rollover properly.

What Happens at the End of a Fixed Term?

When your fixed term ends, your mortgage automatically rolls over. If you take no action, the bank moves you to either:

  • A new fixed term at their standard carded rate (usually higher than what you could negotiate)
  • Their floating rate (significantly higher than fixed rates in most environments)

Neither of these is typically the best available rate. The rollover moment is the single most important opportunity to optimise your mortgage — and most borrowers miss it.

The Rollover Window: Act 30–45 Days Early

The optimal window to act is 30–45 days before your fixed term expires. Why?

  • Your break fee is near zero (you’re almost at the end of your term)
  • You have time to shop around and negotiate without rushing
  • You can lock in a new rate now with most banks — many will allow you to secure a rate 30–45 days in advance at no cost
  • If you want to switch lenders, there’s time for the new lender’s application process (typically 2–4 weeks)

If you miss this window and the term expires without action, you’re on the bank’s default rate. You can still renegotiate — but you’ve lost your leverage.

Step 1: Know Your Current Position

Before approaching your bank or broker, understand your situation:

  • Current balance: Check via internet banking
  • Fixed term expiry date: In your mortgage documents or internet banking dashboard
  • Current fixed rate: The rate you’ve been paying
  • LVR: Has your property increased in value? A lower LVR may qualify you for better rates.
  • KiwiSaver: Irrelevant at rollover, but relevant if you’re purchasing
  • Break fee (if applicable): If you’re considering switching before expiry, get a quote from your bank

Step 2: Research Current Market Rates

Check what rates are available from:

  1. Your existing bank’s website — their carded (advertised) rates
  2. Competitor banks — ANZ, ASB, BNZ, Westpac, Kiwibank rates
  3. Interest.co.nz — aggregates NZ mortgage rates in one table
  4. A mortgage broker — brokers have access to rates not always advertised publicly, and can approach multiple lenders on your behalf

The carded rate is rarely the best rate your bank will offer. Banks routinely give 0.1%–0.3% discounts to borrowers who ask — particularly those with good LVR, consistent repayment history, and multiple products with the bank.

Step 3: Contact Your Existing Bank

Call your bank’s mortgage team (not a general call centre) or visit a branch and say:

“My fixed term is expiring in [X] days. I’d like to discuss my options. What’s your best rate for a [1/2/3]-year term?”

Do not accept the first offer. Come back with:

“I’ve been looking at what’s available elsewhere. [Competitor] is offering [X]%. Can you match that?”

Banks have retention teams specifically to keep existing customers. A well-established relationship, good LVR (low leverage), and a competing offer are your strongest leverage points. Most banks can move 0.1%–0.3% off their carded rate without escalation — larger discounts require manager approval but are possible.

Step 4: Consider Switching Lenders

If your bank won’t match the competition, or if another lender is offering a materially better rate plus cashback, switching may be worth it.

The switching calculation:

ItemAmount
Rate saving (0.4% on $600,000 × 2 years)$4,800
Cashback from new lender+$3,500
Legal/discharge costs−$1,500
Net benefit over 2-year term$6,800

In this example, switching easily makes sense. The break-even calculation becomes tighter if the rate differential is smaller.

Important: If the new lender offers cashback, check the claw-back terms — typically you must stay for 2–3 years or repay part of the cashback.

See Refinancing Your Mortgage NZ for a complete switching guide.

Step 5: Choose Your New Term

At rollover, decide:

  1. Which rate type: Fixed or floating? (Fixed is usually better in most rate environments)
  2. Which term: 6 months, 1 year, 2 years, 3 years, or 5 years?
  3. Split or single: Do you want to split the mortgage across multiple terms?

See When to Fix Your Mortgage NZ for guidance on choosing the right term based on the current rate environment.

What to Avoid at Rollover

1. Rolling over passively The most expensive option. The bank’s default rate is rarely competitive. Always actively manage your rollover.

2. Locking in a long term without shopping around A 5-year fix at the wrong rate can cost $20,000+ more than a 2-year fix at a better rate, with no break fee flexibility.

3. Missing the window If your term expires without action and you end up on floating, you can still fix — but you may be paying the floating rate (7%+) for weeks while the new fixed term is arranged. On $600,000, every extra month at 7.09% instead of 5.55% costs approximately $770.

4. Assuming your bank’s offer is the best available It almost never is. Always compare.

Refixing Quickly: The Simple Version

If you want to handle this with minimum effort:

  1. Set a calendar reminder 45 days before your fixed term expiry date
  2. Go to interest.co.nz and find the lowest 1 or 2-year fixed rate from any major bank
  3. Call your existing bank and ask for their best rate for that term
  4. If they match or come within 0.1%, accept and renegotiate the following term
  5. If they won’t, contact a mortgage broker who can find you the best deal and manage the switch

Time investment: 1–2 hours. Potential saving: $2,000–$10,000+ over the next term.

Further Reading