For many Kiwi homeowners, refixing a mortgage can feel like a routine task. You choose a new interest rate, select a fixed term and move on.
However, your refix is also an opportunity to take a broader look at your mortgage and make sure it still suits your circumstances, cash flow and future plans.
One of the most common situations I see is a homeowner choosing a new fixed rate through their online banking app without first considering what else might change during that term. It is quick and convenient, but it can also mean important questions are overlooked.
When refixing a mortgage, homeowners should review more than the advertised interest rate. The timing, fixed term, loan structure, repayment flexibility and future plans can all influence which option is most suitable.
Here are some of the common mistakes I see homeowners make and what you may want to consider before locking in your next rate.
A common mistake is waiting until the last minute to think about refixing.
Many banks will contact you around 60 to 90 days before your fixed rate expires. That can feel like plenty of time, so it is easy to put the reminder aside and think you will deal with it later.
Before you know it, the expiry date is approaching and the decision becomes rushed.
Starting the conversation early gives you time to understand the rates available, compare different fixed terms and consider whether your existing mortgage structure still works for you.
You do not necessarily need to lock in a new rate as soon as your options become available. However, reviewing them early means you can make a considered decision rather than choosing under pressure.
If you do not select a new fixed term before your current one expires, your loan will generally move onto a floating interest rate.
Floating rates are often higher than the fixed rates available at the same time. Staying on floating, even for a relatively short period, could therefore mean paying more interest than necessary.
Your bank may also present you with several refixing options through online banking. While selecting one can be convenient, the shortest rate or lowest advertised rate is not automatically the best fit for your circumstances.
Before accepting an offer, it is worth considering how long you expect to remain in the property, whether your income or expenses could change and how much certainty or flexibility you would like.
A Mortgage Adviser can help you understand the available options and how the different terms may affect your plans beyond the interest rate itself.
Fixing the entire mortgage for the same length of time can feel like the simplest approach. However, it also means the whole loan will come up for renewal on the same date.
That can leave your entire mortgage exposed to whatever interest rates are available at that point.
Some homeowners choose to divide their mortgage into separate portions and fix each portion for a different term. For example, one portion might be fixed for one year while another is fixed for two or three years.
This approach can spread out future refix dates and provide more flexibility if interest rates or your circumstances change. It also means you are not making one interest-rate decision for your entire mortgage.
Splitting a mortgage will not suit every homeowner, but it is an option worth discussing rather than automatically fixing the full balance for one term.
Another mistake I often see is focusing entirely on the interest rate and overlooking how the mortgage itself is structured.
A refix can be a useful opportunity to consider whether features such as an offset account, revolving credit facility or additional repayment flexibility could benefit you.
For households with savings or strong cash flow, the right structure may help reduce the amount of interest paid while still keeping money accessible. Other homeowners may prefer the simplicity and certainty of a more traditional fixed loan.
The best structure is not necessarily the one with the most features. It is the one that suits how you earn, spend and save.
This is where personalised advice can be valuable. A structure that works well for one household may create unnecessary complexity for another, even when the mortgage balances are similar.
Your mortgage should support where you want to go next, not just where you are today.
Before choosing a new fixed term, think about what may change over the next few years. You could be planning to renovate, upgrade your home, buy an investment property, reduce your working hours or focus on repaying debt faster.
These plans may influence the fixed term and mortgage structure that make the most sense.
For example, fixing your entire mortgage for a longer period may provide repayment certainty. However, it could also reduce your flexibility if you expect to sell the property or make significant changes to your lending during that term.
You do not need to have every future detail worked out. Even a general idea of what might be ahead can help you make a more informed refixing decision.
Before choosing a new fixed term, consider:
These questions can help you look beyond the advertised rate and assess how well each option fits your wider financial position.
For many homeowners, refixing happens every one to three years. That makes it one of the most regular opportunities to check whether your mortgage is still working as well as it could be.
The key is to treat your refix as a mortgage review rather than simply a rate decision. The interest rate matters, but the right fixed term, loan structure and level of flexibility can be equally important.
If your fixed rate is coming up for renewal, it may be a good time to take a fresh look at your options. Speaking with a Mortgage Adviser can help you understand what is available and make a decision that supports both your current circumstances and your future plans.
If you would like to talk through your upcoming refix or sense-check your current mortgage setup, feel free to get in touch. I’m always happy to have a chat.