Mortgage Refinance Calculator

You should consider refinancing when the new interest rate is at least 0.5% lower than your current rate, you have a reasonable amount of time left on your loan (typically at least 3-5 years), and the refinance cost can be recovered through interest savings within a reasonable break-even period. Also refinance if your fixed term is expiring and you want to shop around rather than accept your bank's rollover rate. Use this calculator to model your specific numbers — a 1% rate drop on a $500,000 loan can save over $30,000 in interest.

The break-even point is the number of months it takes for your monthly savings to exceed the upfront cost of refinancing. For example, if refinancing costs $2,000 in legal and valuation fees but saves you $100 per month, your break-even is 20 months. After that point, every dollar saved is pure benefit. If you plan to sell or refinance again before the break-even point, the switch may cost you more than it saves. The break-even should ideally be within 2-3 years for the refinance to be worthwhile.

NZ refinance costs typically range from $1,000 to $3,000 and include: legal/conveyancing fees ($800-$1,500) to discharge the old mortgage and register the new one; a property valuation if required by the new lender ($500-$800); a bank discharge fee ($100-$250); and a new loan establishment fee ($0-$500, often waived by the new lender as an incentive). Some lenders offer cash-back contributions to offset these costs. If you are breaking a fixed-rate loan early, you may also face a break fee which can be substantial — always check this with your current lender before deciding.

Extending the loan term reduces your monthly repayment but increases total interest paid over the life of the loan. For example, refinancing a $400,000 loan with 20 years remaining into a new 30-year term at a lower rate will drop your monthly payment significantly, but you will pay interest for 10 extra years — often wiping out the rate savings. A better approach: refinance to a lower rate while keeping (or shortening) the remaining term. Use this calculator to compare different term lengths side by side and see both the monthly savings and the total interest impact.

Fixed rates lock in your interest rate for a set period (typically 1-5 years in NZ), giving certainty on repayments. Floating rates can change at any time based on the OCR and market conditions. When refinancing, most borrowers fix at least a portion of their loan. Fixed rates are usually lower than floating, but breaking a fixed loan early triggers a break fee that can be large if wholesale rates have fallen since you fixed. If you are currently on a floating rate, refinancing is simpler and cheaper (no break fee). If you are mid-fixed-term, check the break cost with your current lender before comparing offers — it may wipe out any rate advantage.