Refinancing your mortgage means replacing your existing home loan with a new one. This could be through a different bank or by restructuring with your current lender. Refinancing can lower repayments, reduce interest, or give you flexibility.
This guide explains how home loan refinancing works in New Zealand, when to consider it, and what steps to take.
What Does Refinancing Mean?
Refinancing is more than just moving banks. It’s about reviewing your current mortgage and deciding if another structure or lender would suit you better.
• Switching banks
Moving your loan to a different lender offering sharper rates or cashback deals.
• Negotiating with your bank
Asking your current bank to match or improve your loan terms during a mortgage review.
• Restructuring your loan
Adjusting between fixed, floating, or split loans, or changing the term length.
• Accessing equity
Borrowing against the increased value of your property for renovations, investments, or consolidating debt.
Refinancing your mortgage needs to align with your financial goals, not just short-term interest rate changes.
When to Consider Refinancing
Home loan refinancing isn’t always necessary, but in certain situations, it can make a significant difference.
• End of a fixed term
Banks automatically move loans to floating rates unless you refix or refinance.
• Changes in interest rates
If market rates drop, refinancing may secure a lower repayment.
• Life changes
A new job, family changes, or moving house can make a new structure more suitable.
• Debt consolidation
Refinancing can bring high-interest debt into your home loan, reducing overall costs.
• Renovations or investments
Accessing equity can help fund long-term projects.
Take advantage of cashback offers. A cash back offer is a payment you get when you settle your new loan with a bank. The amount you get varies but can be as high as 1% of the loan value. So if you borrow $500,000 you could get up to $5,000 cash back. Taking advantage of these offers can really help reduce your mortgage costs over time. For example on a 500,000 loan you could knock over 3 years off your mortgage and reduce your total interest payments by over 60,000 over the life of your loan. At Taranaki Home Loans we help you actively plan this out making the process as simple and pain free as possible.
The Refinancing Process in NZ
Refinancing follows a clear set of steps.
1. Mortgage review
A broker or lender looks at your current loan, income, and goals.
2. Compare options
Rates, cashbacks, and repayment structures are compared across banks.
3. Application
You provide updated documents: payslips, bank statements, ID, and information on your property.
4. Approval
The lender confirms how much they will lend and on what terms.
5. Settlement
The new bank pays off your old loan, and your new mortgage begins.
This process usually takes a few weeks, depending on how quickly documents are provided and whether a valuation is required.
Costs and Benefits of Refinancing
Refinancing can save money, but it’s important to check the fine print.
Always weigh upfront costs against long-term benefits before deciding. Supporting you with these decisions is our specialty.
Reviewing Regularly
Refinancing isn’t a one-time decision. Your mortgage should be checked against current rates on an ongoing basis.
The most effective approach is to have your loan actively tracked, with regular updates on when action may save you money.
This is the Taranaki Home loan approach for our customers and ensures you stay ahead, instead of reacting only when costs rise.
Conclusion & Next Steps
A refinance mortgage can save money, reduce stress, and provide flexibility. The key is timing, understanding costs, and keeping your loan under regular review. Active mortgage monitoring and ongoing reviews mean your loan continues to work for you well beyond settlement.
If you’re considering home loan refinancing, contact us today. We’ll carry out a mortgage review, compare your options, and guide you through the process step by step.
It means replacing your current mortgage with a new one, either with the same bank or a new lender.
Yes, if the savings from lower rates, cash incentives, or better terms outweigh break fees and costs.
Usually two to four weeks, depending on documents and whether a valuation is required.
Some banks cover them with cashback deals, while others expect you to pay.
The most effective approach is to have your loan actively tracked, with regular updates on when action may save you money.