Fixing or Refixing Your Mortgage: 3 Questions to Ask Before You Lock In
Let's be honest, refixing your mortgage doesn't exactly set your pulse racing. It's not like buying your first home, where you're popping champagne and posting photos on social media. But here's the thing: this quiet, unglamorous decision might be one of the most financially significant moves you make all year.
Whether your fixed term is ending next month or you're already on a floating rate wondering what to do, this is your chance to properly align your home loan with your actual life, not just tick a box and hope for the best.
So before you click "confirm" on that new rate, let's talk about the three questions that actually matter (and a few bonus considerations that could save you thousands).
First Things First: Refix or Refinance?
Before we dive in, let's clear up some confusion. These terms get thrown around interchangeably, but they're quite different:
Refixing means locking in a new interest rate and term with your current lender. It's straightforward, usually done online or with a quick call, and there's generally no application process or fees involved.
Refinancing means moving your entire home loan to a different bank. This involves a full application, potentially new valuations and legal work, but it might come with cashback offers or better ongoing rates.
This blog is about refixing—the thing you'll do every 1-3 years throughout your mortgage journey. Think of it as regular maintenance for your biggest financial commitment.
Why November 2025 Is an Interesting Time to Refix
Right now, we're in a fairly unique position in the interest rate cycle. Rates have fallen significantly from their 2024 peaks, with competitive 1- and 2-year fixed rates sitting around 4.45% to 4.50%—a welcome relief after the painful highs of recent years.
The consensus among economists is that we're near the bottom of this cycle. The Reserve Bank may deliver one final Official Cash Rate cut in November 2025 (potentially to 2.25% or even 2.00%), which could nudge short-term rates slightly lower. But after that? Most forecasts suggest rates will plateau through 2026 before gradually increasing again.
What does this mean for you? Well, if you've been waiting for the "perfect" time to lock in a low rate, you're probably looking at it. The window won't stay open forever.
How to Actually Refix Your Mortgage
The mechanics are simpler than you might think:
Plan ahead: Most banks let you lock in a new rate up to 60 days before your current term expires. Don't leave it until the last minute, otherwise, you'll automatically roll onto a floating rate, which is currently sitting around 5.30% to over 6%. That's significantly higher than fixed rates, and not where you want to accidentally end up.
Check your options: Log into your online banking or mobile app. Most banks now have a "Choose a new rate" option right there. You can also ring your bank directly or, better yet, talk to a mortgage adviser who can compare options across multiple lenders.
Select and confirm: Once you've made your decision (more on that below), confirm your selection. Your new rate takes effect when your current term ends. Some banks, like TSB and Kiwibank, offer rate guarantees, if rates drop before your new term starts, you'll automatically get the lower rate. Nice little safety net.
Now, let's get to the questions that will actually help you make a smart decision.
Question 1: What's the Interest Rate Outlook—And How Much Certainty Do You Need?
This question has two parts, and you need to think about both:
The external picture: Where are rates heading? Right now, we're likely near the bottom. Reserve Bank data shows a clear trend: since the beginning of 2025, residential mortgage lending fixed for six months or less has dropped around 7%, while lending on 1-2 year terms has risen 28%. That tells you what informed borrowers are doing, they're locking in longer terms to secure these rates before they start climbing again.
Six-month fixed rates are currently about 45 basis points higher than 1- and 2-year rates. That's the market telling you it doesn't expect rates to fall much further. For short-term rates to be worth it, they'd have to drop significantly by year-end, and most major banks consider this unlikely.
Your personal picture: How much does certainty matter to you? If your budget is tight, or if rate increases would genuinely stress your household finances, locking in a longer term (2-3 years) gives you predictable repayments and genuine peace of mind. You'll know exactly what's going out each fortnight, regardless of what happens in the broader economy.
On the other hand, if you value flexibility over certainty, perhaps because you're planning to make lump sum payments, or you're comfortable with some risk, a shorter term or even a floating portion might suit you better.
There's no "right" answer here. It comes down to your risk tolerance and what lets you sleep at night.
The Fix vs Float Comparison
Here's how the two main options stack up:
| Factor | Fixing Your Mortgage | Floating Your Mortgage |
|---|---|---|
| Repayment Certainty | High: Your repayments stay the same for the entire fixed term, making budgeting straightforward and predictable. | Low: Repayments fluctuate with market changes, making it harder to budget with confidence. |
| Future Rate Changes | Risk: If rates drop further, you've locked in a higher rate and can't benefit. But you're also protected if rates rise. | Opportunity: You benefit immediately from rate drops, but you're fully exposed to increases—and floating rates are already significantly higher. |
| Flexibility | Limited: Extra repayments may be capped (though most banks allow up to 20% above minimum). High break fees apply if you sell or refinance early. | High: Complete flexibility for extra payments, restructuring, or selling without penalties. |
| Best For | Those who value stability, have tight budgets, or plan to stay in their home long-term. | Those comfortable with risk, expecting significant extra payments, or planning to move/sell soon. |
Our take? In the current market, floating rates (5.30%-6.00%) are substantially higher than fixed rates (4.45%-4.50%). Unless you have a specific reason for needing maximum flexibility, you're paying a premium to float right now.
Question 2: When Do Your Other Loan Accounts Roll Over?
If you've split your mortgage into multiple accounts (and if you haven't, we should talk about that), paying attention to when each portion comes up for refixing can be a genuinely smart risk management strategy.
Here's why: imagine you have £400,000 in lending split into two £200,000 accounts. If both portions come off their fixed terms at exactly the same time, and rates have increased by then, you'll cop the full impact in one hit. Your repayments could jump significantly, all at once.
But if you stagger your refix dates, say, one portion for 18 months and another for 2 years, you spread that risk. Not all your loans refix at the same time, and you're not hit with multiple increases simultaneously. It's like diversification for your mortgage structure.
When you refix this time, consider the bigger picture:
When do your other portions come up for renewal?
Would it make sense to offset the terms so they don't all end together?
Could you benefit from having different portions on different rate terms anyway?
This is exactly the kind of strategic thinking a mortgage adviser can help you with. It's not complicated, but it does require looking beyond just today's decision.
Question 3: What's Changing in Your Life Over the Next 1-2 Years?
Right, this is where we get real. Your mortgage shouldn't exist in some abstract financial vacuum, it needs to reflect your actual life. Before you commit to a new fixed term, think honestly about what's on your horizon:
Are you planning to sell your house?
Even if it's just a possibility, maybe you're thinking about relocating for work, or you've started browsing Trade Me Property "just to see what's out there", this matters. If you sell during a fixed-term period, you'll likely face break fees. These can be substantial, especially if you fixed when rates were low and they've since increased.
Options to consider:
Fix for a shorter term to maintain flexibility
Keep a portion on floating if you're genuinely uncertain about your plans
Request a break fee estimate from your bank (they won't judge you, and quotes are usually valid for 24 hours)
Don't get caught by surprise. Break fees can run into thousands of dollars.
Is your income likely to change?
Whether it's a pay rise, a new job, commission or bonus structures, or (less pleasant) redundancy risk, your income trajectory matters for this decision.
If you're expecting income growth: Consider fixing at a level that allows you to increase repayments by up to 20% during the fixed term (most lenders allow this). You can chip away at your principal faster without penalty.
If income is uncertain: You might want more flexibility. A shorter fixed term, a floating portion, or even requesting interest-only repayments for a defined period (in certain circumstances) could provide breathing room. A revolving credit facility might also give you access to funds if needed while still reducing your overall mortgage.
Do you have savings or expect a lump sum soon?
This is golden timing. When you refix, you can usually make a lump sum payment without incurring break fees. Even if you're only a few weeks out from your refix date, paying down your principal before you lock in the new rate reduces your overall loan balance and, consequently, your ongoing repayments and total interest.
Some strategies:
Use savings you've accumulated to reduce your principal
If you have a revolving credit facility, consider pulling funds from there to make a lump sum payment, then rebuild the facility afterward
If you're expecting a work bonus, inheritance, or other windfall, ask your adviser whether your bank allows extra payments during the fixed term—or whether a different lender might offer more flexibility
Are you starting a family?
This is huge, and it's often overlooked. Parental leave, reduced working hours, or increased household costs (nappies aren't cheap, and neither is childcare) can make higher mortgage repayments genuinely difficult to manage.
When refixing:
Make sure your repayment structure is affordable during periods of reduced income
Consider whether you might need to reduce repayments later (remembering that once you increase them, you can't drop them again until the fixed term ends)
Use budgeting tools like Sorted.org.nz to model your future cashflow realistically
Better to plan for this now than scramble later when you're sleep-deprived and dealing with a newborn.
Beyond the Big Three: Other Considerations
Split Your Mortgage Across Different Terms
This "best of both worlds" approach is becoming increasingly popular. Put a portion of your mortgage on a longer fixed term (say, 2-3 years) for stability and predictable repayments. Keep another portion on a shorter term (6-12 months) or even floating for flexibility with extra payments.
For example, on a $500,000 mortgage:
$350,000 fixed for 2 years at 4.50% (certainty for the bulk of your loan)
$150,000 fixed for 1 year or floating (flexibility for extra repayments)
This way, you're not betting everything on one strategy. You get stability and flexibility.
Ask About Flexible Features During Your Fixed Term
Most lenders allow you to increase your repayments by up to 20% without penalty, even during a fixed period. This is brilliant if you expect your income to grow, you can pay off your mortgage faster without waiting for your fixed term to end.
Important caveat: Once you increase your repayments, you generally can't reduce them again until the fixed term ends. So make sure any increase is sustainable.
Consider Restructuring Your Entire Loan
Refixing isn't just about picking a new rate, it's an opportunity to review your entire loan structure:
Should you consolidate multiple portions?
Would a revolving credit facility help you manage cashflow?
Are there better features available now that weren't when you first took out the loan?
A mortgage adviser can help you see opportunities you might not spot on your own.
The Current Market Sweet Spot
Given where we are in November 2025, here's what seems to be working for most borrowers:
Fix for 1-2 years: This captures the current low rates while maintaining reasonable flexibility to refix again if circumstances change. It's the most popular option right now for good reason.
Fix for 2-3 years if you need certainty: With rates near their bottom and increases expected from late 2026 onwards, locking in for longer protects you against those future rises. The rate difference between 2-year and 3-year terms is currently quite small.
Avoid floating unless you have specific reasons: At 5.30%-6.00%, floating rates are significantly higher than fixed rates. Unless you're genuinely planning to sell soon or make massive extra payments, you're paying a premium for flexibility you might not use.
Be cautious about very short terms (6 months): Six-month rates are about 45 basis points higher than 1-2 year rates right now. The market is telling you it doesn't expect further significant drops. For a 6-month term to make financial sense, rates would need to fall considerably by mid-2026, and that's not what most economists are forecasting.
Don't Do This Alone
Look, we get it, banks make refixing dead easy now. A few clicks online, job done. But "easy" doesn't always mean "optimal."
Refixing might not grab headlines like buying a house or winning Lotto, but done well, it can save you literally thousands of dollars over the life of your loan. Done poorly, or just without much thought, and you'll kick yourself when rates rise and you're locked into a structure that doesn't work for you.
A good mortgage adviser will:
Compare rates and cashback offers across multiple lenders (yes, sometimes refinancing to a different bank makes more sense than refixing)
Help you structure your loan strategically, not just reactively
Model different scenarios based on your actual circumstances
Keep an eye on your bigger financial picture, not just this one decision
The current market conditions won't last forever. We're in a window of opportunity that could close within months. If your fixed term is ending soon, or if you're currently floating, now is genuinely the time to pay attention and make an informed decision.
Take the time to ask these three questions. Think about your life, not just the interest rate. And if you're not sure? Talk to someone who does this professionally.
Your future self - the one who's paying less interest and sleeping better at night - will thank you.