Refinancing Your NZ Mortgage: A Strategic Playbook for Financial Success

July 17, 2025

Refinance Your Mortgage: A Strategic Guide to a Better Home Loan in NZ

Key Takeaways

  • Unlock Savings:  Refinancing can help you secure a lower interest rate, potentially saving you thousands over the life of your loan and helping you pay off your mortgage faster.
  • Strategic Financial Tool:  Beyond just a better rate, you can refinance to consolidate high-interest debt, unlock home equity for renovations or investments, or restructure your loan for more flexibility.
  • Understand the Process:  The refinancing journey involves assessing your finances, comparing lenders, applying for a new loan, and completing the legal conveyancing to switch from your old lender to the new one.
  • Be Aware of Costs:  Potential costs can include break fees (if on a fixed rate), valuation fees, and legal fees. Planning for these is a crucial part of the decision.

In a climate of economic uncertainty, it’s natural for Kiwi homeowners to feel cautious about making big financial moves. Yet, it’s often during these times that the most significant opportunities arise. Refinancing your mortgage is one such opportunity—a powerful strategic tool that can reshape your financial landscape for the better. Many New Zealanders are already exploring this path; a recent survey found that a net 29% of mortgage advisors are seeing more people looking for advice on refinancing their loan. This growing interest highlights a clear trend: homeowners are actively seeking ways to improve their financial position.

But what does it really mean to refinance your home loan? It’s more than just chasing a lower interest rate. It’s about taking control, optimising your biggest asset, and aligning your mortgage with your current life and future goals. Whether you're thinking of refinancing to reduce your monthly repayment, pay off your loan faster, or free up cash for other ventures, the process can feel daunting. That's where we come in. At ConveyOnline, we believe the legal side of property transactions should be simple, transparent, and affordable. Our goal with this guide is to demystify the refinancing process, giving you the clarity and confidence to decide if it's the right move for you. We offer convenient, reliable online property law services designed to be completely hassle-free, so you can focus on securing the best deal for your future.

Why Consider Refinancing Your Home Loan?

Refinancing your mortgage is essentially replacing your existing home loan with a new one, either with your current lender or a new bank. While the process requires some effort, the potential benefits can be substantial, making it a worthwhile consideration for many homeowners.

Secure a Lower Interest Rate

This is the most common reason people look to refinance. The mortgage market is competitive, and lenders are constantly updating their offers to attract new customers. Securing a lower interest rate, even by a small fraction of a percent, can lead to significant savings. A better rate reduces your interest costs, which can lower your regular loan repayments, freeing up cash flow for other expenses or savings. Alternatively, you could keep your repayments the same and pay off your mortgage years sooner, saving a considerable amount in interest over the loan term.

Consolidate High-Interest Debt

Do you have other debts like credit cards, personal loans, or car finance? These often come with much higher interest rates than a typical home loan. Refinancing allows you to roll these expensive debts into your mortgage. By consolidating them under a single, lower interest rate, you can simplify your finances with one manageable repayment and drastically reduce the total interest you pay. This can be a powerful strategy to get on top of your debt and accelerate your journey to being debt-free.

Unlock Home Equity for Other Goals

Over time, as you pay down your mortgage and your property value increases, you build up equity. Equity is the difference between your home's market value and your outstanding loan balance. Refinancing can be a smart way to access or ‘unlock’ a portion of this equity. Homeowners often use this capital to fund major life projects, such as:

  • Home renovations or extensions
  • A deposit for an investment property
  • Funding for a business venture
  • Helping children with their first home deposit
  • Paying for significant education costs

Using your home's equity can be a more cost-effective way to borrow money for these goals compared to taking out a separate personal loan.

Restructure Your Loan for Better Flexibility

Your financial situation and goals change over time. The loan structure that worked for you as a first home buyer might not be the best fit five years later. Refinancing gives you a chance to restructure your mortgage to better suit your current needs. This could involve:

  • Changing your loan term:  Shorten the term to pay off the mortgage faster or lengthen it to reduce your repayment amount.
  • Switching between interest rate types:  Move from a fixed rate to a floating rate for more flexibility, or vice versa for more certainty. You could also split your loan between both.
  • Adding features:  You might want to switch to a loan that offers features like an offset account or more flexible repayment options.

When Should You Refinance a Mortgage?

The best time to refinance your mortgage is when the benefits clearly outweigh the costs and effort involved. While there's no single perfect moment, certain triggers often signal that it's a good time to review your options. One of the most common opportunities is when your fixed rate period is coming to an end. This allows you to switch lenders without incurring a penalty or break fee. It's wise to start your research a month or two before your fixed term expires to give yourself plenty of time. Other key moments to consider refinancing include a significant drop in market interest rates, a substantial increase in your property's value (and therefore your equity), or a major change in your personal financial situation, such as a salary increase that allows you to make higher repayments and shorten your loan term.

The Refinancing Process Step-by-Step

Feeling ready to explore your options? Breaking the process down into manageable steps makes it much less intimidating. Here’s a clear path to follow when you’re looking to refinance your mortgage.

Step 1: Assess Your Financial Situation and Goals

Before you even talk to a lender, take stock. What are you trying to achieve? Do you want a lower repayment, to pay off debt, or to unlock equity? Calculate your current home equity (your property’s estimated value minus your loan balance). Check your credit score and gather documents like proof of income, bank statements, and details of your existing loan. This preparation will make the next steps much smoother.

Step 2: Research and Compare Lenders

Don't just accept the first offer you see. Shop around to find the best deal. Compare the interest rates, fees, and features offered by different banks and lenders. A mortgage adviser or broker can be invaluable here, as they can compare a wide range of products on your behalf and help you find a loan that suits your specific situation and goals.

Step 3: Submit Your Loan Application

Once you’ve chosen a lender and a loan product, it’s time to formally apply. This is where the documents you gathered in Step 1 come into play. The new lender will assess your application based on their lending criteria, which includes your income, expenses, credit history, and the equity in your home. They may also require a registered valuation of your property to confirm its market value.

Step 4: The Legal Conveyancing Process

Once your new loan is approved, the final step is the legal work, known as conveyancing. This involves your lawyer coordinating with your old bank and your new one. They will arrange for your existing mortgage to be discharged (paid off and removed from your property title) and the new mortgage to be registered. This ensures the new lender’s loan is secured against your property. This stage can seem complex, but it doesn’t have to be. At ConveyOnline, we specialise in making this part of the process seamless and stress-free. Our fixed-fee refinancing service starts from $1,249, with no need for in-person meetings with a lawyer. We handle all the legal details online, providing a convenient and affordable way to finalise your refinance from anywhere in NZ.

Common Questions About Refinancing Your Mortgage

It's natural to have questions when considering a financial move as significant as refinancing. Here are answers to some of the most common queries we hear.

What is the downside to refinancing your mortgage?

The main downside to refinancing is the associated costs. These can include legal fees for the conveyancing work, potential application or valuation fees from the new lender, and most significantly, a break fee if you are ending a fixed rate loan early. It's crucial to calculate whether the long-term savings from a lower interest rate will outweigh these upfront costs. There's also the risk that if you extend your loan term to get a lower repayment, you could end up paying more in total interest over the life of the loan. Always do the maths to ensure the move makes financial sense for you.

Can you refinance on a fixed-rate mortgage in NZ?

Yes, you can absolutely refinance while on a fixed interest rate, but you will likely have to pay a 'break fee' or 'break cost'. This fee compensates your current lender for the interest income they will lose because you are ending the fixed rate period early. The cost can vary significantly depending on how much time is left on your fixed term and how much interest rates have changed since you fixed. Your current bank can provide you with a quote for this break fee, which is a critical piece of information for working out if an early refinance is worth it.

Are there fees involved when refinancing?

Yes, there are several potential costs involved in refinancing. The main ones include the legal fees for the conveyancing work, a potential break fee if you're on a fixed rate, and sometimes application or valuation fees from the new lender. At ConveyOnline, we provide certainty around the legal costs. Our fee to manage the legal side of your Refinance Property is from $1,249 inclusive (from $775 + GST & disbursements), ensuring you know exactly what to budget for.

Why Choose ConveyOnline for Your Refinance?

When you’ve done the hard work of comparing lenders and securing a better mortgage, the last thing you need is a complicated or expensive legal process. We created ConveyOnline to modernise property law, making it more accessible, transparent, and affordable for all New Zealanders.

Our entire service is designed for your convenience. You can start the process from your couch without needing a credit card, and our simple 4-step online system guides you through everything. We handle the complex legal coordination between your old and new banks, ensuring a smooth transition. Our fixed-fee structure means no surprises—you know the cost upfront. By choosing us, you're choosing a reliable, efficient, and straightforward partner to help you finalise your smart financial move.

_ Disclaimer:  The information provided in this article is for general informational purposes only and does not constitute financial or legal advice. Your financial situation is unique, and you should consult with a qualified financial adviser or mortgage broker to discuss your specific needs and circumstances before making any decisions about refinancing your mortgage. Lending criteria, fees, and interest rates vary between lenders and are subject to change._

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