Reviewing your mortgage

Fixed rate ending? Review it before you just accept

When a fixed term is up, most people take whatever rate their bank emails them. That moment is actually the cheapest chance you get to change anything: the rate, the structure, the term, even the lender. There are no break fees at the end of a fixed term, so it costs nothing to look properly before you sign.

A blue weatherboard New Zealand home with a deck and cabbage trees, overlooking the harbour in the Bay of Plenty

You do not need a reason to get it looked at

A review is worth doing even if nothing has gone wrong. Things worth mentioning when we talk:

Patricia Pfab, mortgage adviser at Simple Loan, helping first home buyers with low deposits

Four things you can do with an existing mortgage

These often get treated as one decision. They are not, and the right answer is sometimes a combination of them.

Refixing

Staying with your lender

Your fixed term ends and you choose a new one. The important part is that the rate your bank offers first is not always the rate it will agree to, and the term length matters as much as the number. No break fees apply at the end of a fixed term, so this is the moment to review everything.

Refinancing

Moving to another lender

Moving some or all of your mortgage to a different bank, usually for a better rate or a cash contribution. Switching is not automatically the right answer. The real calculation is the rate saving plus any cash contribution, less legal fees, less any clawback your current bank charges.

Restructuring

Same lender, different shape

Sometimes you do not need to move at all. Splitting your loan across terms, adding an offset account or revolving credit, or changing your repayments can do more for you than chasing the last few points on a rate.

Topping up

Borrowing against your equity

If your property has gone up in value you may be able to borrow more against it, for a renovation, a car, or consolidating other debt. Worth doing carefully, because spreading a short term debt over thirty years costs a great deal more than it looks like it does.

What a change can actually cost

Switching is not free, and the costs are the part people forget until the solicitor sends the bill. Three to check before you decide.

Break fees

If you leave a fixed rate early, your lender can charge a break fee. It depends on how wholesale rates have moved since you fixed, so it can be almost nothing or it can be thousands. Your bank has to give you an estimate if you ask, and it is always worth asking before you plan anything.

Cash contribution clawback

Banks often pay a cash contribution when you take a loan with them. It normally comes with a clawback period of a few years, so if you move again inside that window you may have to repay some of it. If you took cash from your current bank recently, check the date before you switch.

Legal and valuation costs

Moving lenders means a solicitor, and sometimes a registered valuation. Neither is huge on its own, but they come off whatever you thought you were saving, so they belong in the calculation rather than as a surprise at the end.

None of this means switching is a bad idea. It means the headline number is not the whole number, and working out the real one takes about twenty minutes.

How a mortgage review works

It is quicker than people expect, and it does not commit you to anything.

Step 1

You send me your current details

Your lender, your balance, your rates and when each fixed term ends. Your bank statement or online banking screen usually has everything I need.

Step 2

I check what is available

What your current bank would offer to keep you, and what other lenders would offer to take you on, including any cash contributions.

Step 3

We work out the real numbers

Rate saving, cash contribution, break fees, clawback, legal costs. One figure at the end rather than a pile of maybes.

Step 4

You decide, with no pressure

Sometimes the answer is to stay exactly where you are, and I will tell you that if it is true. It costs you nothing either way.

Step 5

I handle the change

If you do move or restructure, I prepare the application and manage the process with the lender and your solicitor.

Step 6

We set a date to look again

Most mortgages should get a proper look every time a fixed term ends. I will remind you rather than leaving it to chance.

If your fixed term ends in the next few months, now is the right time to start rather than the week it rolls over.

Why people work with me

I know which lenders to ask

Every lender treats low deposits differently, and those rules change. I put your application where it has the best chance rather than wherever is quickest.

I do the chasing, not you

Paperwork, lender questions, conditions coming back. I handle the back and forth so you can get on with your life.

My advice costs you nothing

The lender pays me once your loan settles. That is the same whether you are buying with 5% or with 20%.

We work with New Zealand's leading lenders

A mortgage adviser for Tauranga and the rest of New Zealand

I work with first home buyers in Tauranga, Mount Maunganui, Pāpāmoa and across the Bay of Plenty, and with plenty of people who live nowhere near me. Most of this happens by phone, email and video call, so where you are does not change the advice or how easy it is to reach me. If you are local and would rather sit down together, that is easy to arrange.

We love hearing from you

Mortgage review questions

The things people ask me most when their fixed rate is ending.

Should I refix with my bank or move to another lender?

It depends on the numbers rather than on loyalty. Work out the rate saving over the new term, add any cash contribution the new bank offers, then subtract legal fees and any clawback your current bank would charge. Sometimes moving wins clearly, sometimes staying does. The answer is usually obvious once it is written down.

It is what a lender charges if you end a fixed rate early. The amount depends on how wholesale interest rates have moved since you fixed, so it can be small or it can be thousands of dollars. Your lender must give you an estimate if you ask for one.

When a bank pays you a cash contribution for taking a loan, it usually comes with a condition that you stay for a set period, commonly a few years. Repay or move the loan inside that window and the bank can recover some or all of the cash. Always check the date before you switch.

No. A slightly higher rate with a better structure, or with a cash contribution that you keep, can leave you better off. The term you fix for usually matters more over several years than a small difference in the rate does.

Yes, and most people do. Splitting means not every dollar comes off a fixed rate at the same time, which reduces how exposed you are if rates have moved when it does. How you split it depends on your plans rather than on a formula.

Nothing. My service is free to you, because the lender pays me once your loan settles. If a review ends with you staying where you are, that is fine too.

Around three months is comfortable. Most lenders will let you lock a new rate some weeks ahead, and starting early means you are choosing rather than reacting.

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