Key Takeaways
If you have decided to move your home loan, this guide explains how to refinance a mortgage in NZ from first quote to settlement. It covers the costs to confirm, the documents lenders ask for, what your lawyer does, and the checks to make once the new loan is in place.
- Get written quotes for break fees, discharge fees and any cashback clawback before you apply.
- Time the switch around your fixed-rate expiry where possible to avoid break fees.
- The new lender will assess affordability, so have income, expense and debt records ready.
- Your lawyer arranges repayment of the old loan, discharges the old mortgage and registers the new one on your title.
- After settlement, update automatic payments and confirm the old loan is closed.
Step 1: Review your current loan and set your goal
Before you contact any lender, get a clear picture of what you have now and what you want the new loan to do. This makes every later step faster and stops you being swayed by an offer that does not suit you.
Gather your current loan details
For each loan split, note the balance, whether it is fixed or floating, the fixed-term expiry date, the repayment amount and frequency, and the remaining term. Find your original loan documents and any cashback agreement. Your lender's app or a recent statement will have most of this.
Be clear on why you are switching
Your goal might be better pricing, an offset or revolving credit facility, a lender whose policy suits a change in your circumstances, or releasing equity. If you are still weighing up whether switching is worth it at all, read our guide to mortgage refinancing advice and when switching pays first.
Check your timing
The simplest time to refinance is when a fixed term ends, because break fees generally do not apply to a loan that is already floating or rolling off. If your fixed term has a long way to run, the cost of breaking it may outweigh the benefit, so get a quote before going further.
Consider whether staying put is enough
Sometimes the outcome you want is available from your current lender. Restructuring the splits, refixing at the end of a term or adding an offset facility may not require a new lender at all. Asking first costs nothing and keeps your options open.
Step 2: Cost the switch
Refinancing has one-off costs that come from different places. Ask for each in writing and keep them in one list so nothing is missed when you compare offers.
| Cost | Who charges it | What to ask |
|---|---|---|
| Break fee | Current lender, on fixed portions repaid early | A written quote and how long it is valid |
| Discharge or early repayment admin fee | Current lender | The amount and when it is charged |
| Cashback clawback | Current lender, if you received a cash contribution | The clawback period and how much would be repaid |
| Legal fees | Your lawyer | A fixed quote for a refinance |
| Valuation and application fees | New lender or valuer | Whether a valuation is needed and who pays |
How break fees work
Under the Credit Contracts and Consumer Finance Act (CCCFA), a lender can charge a reasonable estimate of its loss when you repay a fixed-rate loan early. The fee is usually larger when wholesale interest rates have fallen since you fixed and when more of the term remains. Because market rates move, a quote can change between now and settlement, so ask again close to the date.
New cashback offers
The new lender may offer a cash contribution, which can help cover legal and other costs. It will come with its own clawback period, so read the conditions and be sure you expect to stay for that time.
Step 3: Compare offers and talk to your current lender
With your costs listed, you can compare offers properly. Use the same loan amount, term and structure for each so the numbers are comparable.
Ask your current lender for a retention offer
Tell your lender you are considering moving and what you have been offered. A retention offer can deliver much of the benefit of switching without break fees, legal costs or clawback. Get it in writing, with an expiry date.
Compare the whole package
Look beyond the headline rate to fees, cashback conditions, the rules on extra repayments, and whether you can set up the splits you want. Use our loan repayment calculator to check repayments on each option and to see the effect of keeping your current repayment level.
Questions to ask each lender
- Is the offered rate available for my whole loan, and how long can it be held?
- Is a valuation needed, and who pays for it?
- What are the conditions and clawback period on any cash contribution?
- Can I make lump sum repayments on fixed portions without a fee, and up to what amount?
- How long does approval usually take for a refinance?
Decide your new structure
Refinancing is a good moment to reset your loan structure. You might split the loan across different fixed terms, keep a floating portion for lump sums, or add an offset account. If you are choosing new fixed terms, our guide on when to refix your mortgage can help.
Step 4: Prepare and submit your application
The new lender will assess you as a new customer. Lenders must make reasonable inquiries into your income and expenses under the CCCFA, so a complete application avoids back-and-forth.
Documents lenders usually ask for
- Photo ID and proof of address.
- Recent payslips or, if self-employed, financial statements and tax returns.
- Recent bank statements for everyday and savings accounts.
- Statements for your current mortgage.
- Details of credit cards, personal loans, vehicle finance and buy now pay later accounts.
If you are self-employed
Self-employed borrowers should expect to provide the latest two years of financial statements and tax returns, plus confirmation that tax is up to date. If your latest accounts are not finished, ask your accountant for a timeframe before you apply. Lenders generally assess self-employed income on historical earnings, so current, filed accounts make the process much smoother.
Check your credit report
You can get a free credit report from each of New Zealand's credit reporting agencies: Centrix, Equifax and Experian. If something is wrong, ask the agency or the organisation that reported it to correct the information. The govt.nz guide to checking your credit report explains how.
Valuation
The new lender may want a registered valuation, especially if you are borrowing more or your loan is a large share of the property's value. Ask whether a valuation is required, whether an existing one can be used, and who pays.
LVR and DTI rules for refinancing
The Reserve Bank exempts refinancing from its LVR and DTI restrictions where the new loan is no larger than the original, as set out in its DTI explainer. If you increase the loan, the extra borrowing is assessed under those limits as normal.
Step 5: Approval, loan documents and settlement
Once approved, the process moves to paperwork and legal work. Allowing a few weeks between approval and settlement is sensible, and more if your current fixed term ends on a set date.
Read the loan documents carefully
Check the loan amount, splits, fixed terms, repayment amount and frequency, fees, and any cashback conditions. Make sure everything matches what you agreed. Ask about anything that differs before you sign.
What your lawyer does
Your lawyer receives instructions from the new lender, explains the documents to you, and arranges settlement. On settlement day, the new lender pays out the old loan, your lawyer registers the discharge of the old mortgage and the new mortgage on your title, and the switch is complete.
Insurance and settlement timing
The new lender will usually want confirmation that your house is insured before settlement. Contact your insurer early so the policy records the new lender's interest. If your fixed term ends on a particular date, aim to settle on or just after that date to avoid a break fee.
Step 6: Check everything after settlement
A few simple checks in the weeks after settlement prevent missed payments and confusion.
- Confirm with your old lender that the loan is repaid and closed.
- Set up repayments on the new loan and check the first due date.
- Cancel or move automatic payments, direct debits and salary deposits linked to old accounts.
- Keep your settlement statement and final loan statements.
- Diarise each fixed-term expiry and any cashback clawback end date.
If the new loan has lower repayments, consider keeping your old repayment amount. The extra goes straight off the balance and shortens the time to pay off the loan.
How SHARE - The Advisory can help
We handle the legwork of refinancing: comparing lenders, getting break fee and clawback figures, preparing the application and keeping settlement on track with your lawyer. Find out more about our refinancing and refixing service or contact us to talk through your loan.
Conclusion
Refinancing a mortgage in NZ follows a clear sequence: review your loan, cost the switch, compare offers, apply, settle and tidy up. Most problems come from skipped steps, such as not getting a break fee quote or forgetting a cashback clawback.
Take each step in order, get the important figures in writing, and time settlement around your fixed-term expiry where you can. That keeps the switch smooth and the costs predictable, and it means you start the new loan with a clear plan for the next fixed-term expiry.
Frequently Asked Questions
How long does it take to refinance a mortgage in NZ?
It varies with the lender, the completeness of your application, valuation needs and legal work. Allow several weeks from application to settlement, and start a couple of months before a fixed term ends.
Can I refinance before my fixed rate ends?
Yes, but you will usually pay a break fee on the fixed portion. Lenders can charge a reasonable estimate of their loss, so ask for a written quote before deciding.
Do I need a lawyer to refinance?
Usually, yes. A lawyer or licensed conveyancer is needed to discharge the old mortgage, register the new one on your title and manage settlement between the two lenders.
Can I borrow more when I refinance?
Yes, you can apply to borrow more, for example to renovate or consolidate debt. The additional amount is assessed against the lender's affordability checks and the Reserve Bank's LVR and DTI limits, so you may need more documentation.
Does refinancing affect my credit score?
A new loan application usually results in a credit check, which is recorded on your credit file. Applying with several lenders at once can add multiple enquiries, so a focused application is sensible.
Do LVR and DTI limits apply when I refinance?
Not if the new loan is no larger than the original. The Reserve Bank exempts like-for-like refinancing, but any additional borrowing is assessed under the normal limits.