Refinancing your mortgage can be a smart financial move—especially in today’s ever-changing interest rate environment. Whether you’re looking to reduce monthly payments, pay off your home loan faster, or access extra funds, refinancing could help you achieve your goals. Here’s how Kiwis can navigate mortgage refinancing and potentially save thousands.

What is Mortgage Refinancing?

Refinancing means replacing your existing mortgage with your current lender with a new lender. The main goal is to secure better terms, such as:

• A lower interest rate
• A shorter or longer loan term
• Different repayment options
• Access to home equity
  

When Should You Consider Refinancing?

Refinancing isn’t always the right move, but you might want to explore it if:

• Interest rates have dropped significantly since you locked in your loan
• Your fixed-rate period is ending, and your loan is reverting to a higher floating rate.
• Your financial situation has improved—perhaps financial goals have changed, or your income has increased.
• You want to consolidate debt into your mortgage for a lower overall interest rate.
• You need to free up cash for home improvements, education, or investment.
• Your Current lending is with a non bank lender– you may now qualify for main bank funding
• You have several properties all with one bank – You want to spread your lending across several banks for risk management
• Your interest only period is ending for your investment property – you want this extended to keep your cash flow strong
  

How to Refinance: Step-by-Step

1. Assess Your Current Loan

Start by understanding your existing mortgage:

• Interest rate and term
• Current remaining loan term
• Repayment type (principal + interest or interest-only)
• Break fees or exit costs for leaving early

2. Shop Around

Talk to us for an evaluation and free assessment

• Interest rates (fixed and floating)
• Loan fees and break cost
• Features like offset accounts or redraw facilities

3. Crunch the Numbers

Use a refinancing calculator to work out whether the new deal will actually save you money after factoring in any fees. In many cases, even a 0.5% rate drop can translate into big savings over time.

4. Apply for the New Loan with us to support you in your new structure

You’ll need to provide documentation such as:

• Proof of income (payslips or tax returns)
• Bank statements
• ID and proof of address
• Details of your current loan and property
  

5. Settlement and Loan Transfer

If approved, the new lender will pay off your old loan and take over the mortgage. Your new repayments and terms will then begin. You will need a lawyer to establish the new loan. 

Tips for Maximising Your Savings

• Negotiate with your lender: Even your current lender may offer a better rate if they know you’re thinking of switching.
  ● Consider splitting your loan: A mix of fixed and floating could offer flexibility and savings.
• Don’t overlook the fine print: Compare all the fees involved—application fees, legal costs, and valuation fees can eat into your savings.
• Use a mortgage broker: They often have access to special rates and can handle the paperwork for you.
  

Common Mistakes to Avoid

• Refinancing too frequently and incurring repeated break costs
• Focusing only on interest rates and not on loan flexibility or other features
• Forgetting to budget for refinancing costs
• Extending your loan term unnecessarily, which can increase your total interest paid
• Not considering your current remaining loan term. Time is the true cost of a loan.
  

Refinancing your mortgage can be a powerful way to reduce your repayments, pay off your loan faster, or unlock financial flexibility. But it’s not a one-size-fits-all solution. Do your research, seek professional advice if needed, and take the time to find the right loan for your goals.

Need help comparing mortgage rates or understanding your options? For expert help, get in touch with Beryl. Who can guide you through the process.