Thinking About Refinancing Your Mortgage? Key Things to Know First.
As a mortgage adviser with over a decade of experience in the New Zealand market, I’ve witnessed firsthand how strategic mortgage refinancing can create significant financial opportunities for homeowners. With the recent downward trend in interest rates, many people have been wondering if now is the right time to refinance.
Understanding New Zealand Mortgage Rates in 2025
The current mortgage landscape presents some compelling opportunities. As of July 2025, we’re seeing some competitive fixed-term rates coming through from major banks. This represents a notable improvement from previous years and could mean substantial savings for many homeowners.
What makes the New Zealand mortgage market unique is our preference for shorter fixed-term mortgages, typically ranging from one to five years. This differs significantly from markets like the United States, where 30-year fixed terms are common. This structure creates more frequent opportunities for refinancing and rate optimisation.
Why Refinancing Can Be a Game-Changer
Take James and Olivia, a young family in Wellington. They had a $650,000 home loan on a 6.9% rate and were feeling the squeeze of rising living costs. After reviewing their situation, we locked in a 2-year fixed rate at 4.95%. This reduced their repayments by about $810 each month - freeing up more than $9,500 a year for their household budget. Over the life of their loan, they could save hundreds of thousands in interest.
Refinancing isn’t just about chasing a better rate, though. Here are other powerful benefits:
Simplify Your Finances - Combine credit cards or personal loans into your home loan to reduce overall interest. Also known as “debt consolidation”.
Tap Into Home Equity - Access funds for renovations, education costs, or even an investment property.
Adjust Your Loan Strategy - Shorten your term to become mortgage-free faster or extend it for lower monthly payments.
Refinancing to Simplify Debt and Save Thousands
Emma, a single homeowner in Christchurch, was juggling a $400,000 mortgage at 7.2% alongside $25,000 in credit card and personal loan debt at rates over 18%. After reviewing her options, we refinanced her mortgage to a new 2-year fixed rate of 4.95% and consolidated her high-interest debts into the home loan.
The result? Her monthly repayments dropped by nearly $1,000, giving her breathing room and a clear path to becoming debt-free faster. Over time, she stands to save tens of thousands in interest - without the stress of multiple repayments.
Refinancing for debt consolidation can help you:
Lower Interest Costs - Move high-interest debt into your mortgage at a much lower rate. (Note: This needs to be structured properly so you don't end up paying more interest in the long run - another benefit of working with a mortgage adviser)
Simplify Payments - One regular payment instead of multiple bills.
Get Back on Track - Free up cash flow and reduce financial stress.
Why Partner with a Mortgage Adviser When it Comes to Refinancing?
The mortgage market’s complexity often surprises even experienced homeowners.
Recent research by Financial Advice New Zealand reveals an impressive 87% of those who reviewed their mortgage with an adviser’s help believe the changes will save them money. Here’s why:
Market Access: I maintain relationships with multiple lenders and in some cases have access to rates and products not directly available to consumers. Currently, I work with 20+ lenders, each offering unique products suited for different situations.
Personalised Strategy: Every homeowner’s situation is unique. Recently, I worked with a client approaching retirement who wanted to refinance to a shorter term. We structured a solution that slightly increased their monthly payments but will save them around $75,000 in interest over the life of the loan.
Process Management: I handle all the paperwork, negotiations, and communications with lenders. This typically saves my clients 15-20 hours of personal time during the refinancing process.
Making the Move: Next Steps
The best time to review your mortgage is now, especially if:
Your fixed term is ending within the next 6 months
You haven’t reviewed your mortgage structure in the past 2 years
Your financial situation has changed significantly
Would you like to understand how much you could save through refinancing?
Let’s connect. Feel free to schedule a no-obligation review of your current mortgage structure.
