Finance & business New Zealand
Refinance Calculator New Zealand
A lower rate looks like an easy win, but a break fee, legal costs and a cashback clawback can eat the saving. Enter your balance, your current and new rates and the costs of switching to see the lower repayment and how many months it takes to come out ahead.
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Ask your bank for the break fee on any fixed term you leave early.
Some lenders pay cashback to move; it may be repaid if you leave within a set time.
Monthly saving
—Repayment now
—
Repayment after refinancing
—
Switching costs less cashback
—
Break-even
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Saving over the years you keep it
—
Interest saved over the full term
—
The comparison
An estimate, not advice. General information and estimates only, not financial advice. Rates, fees and rules change, so check the lender's own terms and speak to a licensed adviser before you act.
Is it worth refinancing my home loan?
It is worth it when the repayment saving over the time you keep the loan is bigger than the cost of switching. Moving $600,000 from 5.99% to 5.49% over 25 years saves about $181.20 a month, and with $500 of costs less a $3,000 cashback you are ahead from the first month.
Timing a switch
The cheapest time to refinance is when your fixed term ends, because there is no break fee. Mid-term, the bank charges a fee that reflects its lost interest, which can be large if rates have fallen since you fixed. Ask for a break-fee quote before you decide, as it changes with the market.
If you are on a floating rate there is usually no fee to leave, so the decision is simply whether the new rate and terms are better.
Beyond the rate
Compare the other terms: how much extra you can pay each year, whether there is a revolving credit option, the fees, and the conditions on any cashback. Cashback usually has a clawback if you repay or leave within a few years.
Your existing bank may match a competitor's rate if you ask, which saves the switching costs entirely.
To see the effect of extra payments, use the extra repayments calculator.
How this is calculated
The rule, step by step, so you can check any figure by hand.
repayment = loan × r ÷ (1 − (1 + r)^−n), with r = rate ÷ 12monthly saving = repayment now − repayment at the new rate (same term)net switching cost = costs − cashbackbreak-even months = net switching cost ÷ monthly savingsaving over the years kept = monthly saving × months − net switching cost
The calculation holds the term the same, so the whole saving comes from the lower rate. Stretching the term when you refinance would lower the repayment further but raise the interest you pay in total, so treat a lower repayment from a longer term with care.
In New Zealand the biggest cost of leaving is often the break fee on a fixed rate, which depends on how far market rates have fallen since you fixed. Your bank can quote it. Many borrowers wait until the end of a fixed term, when there is no break fee, to switch.
A worked example
A $600,000 loan, 25 years left, moving from 5.99% to 5.49% with $500 of costs and $3,000 cashback.
- Repayment now$3,862.14
- Repayment at the new rate$3,680.94
- Monthly saving$181.20
- Costs less cashback-$2,500.00
- Saving over 10 years after costs$24,243.87
$181.20 a month, ahead from the start.
Check whether the cashback has to be repaid if you leave early.
Rates change
Your new rate will reset at the end of its fixed term, and could be higher or lower. The calculation assumes the new rate applies for the whole loan, so it shows the best case for the saving. Treat the long-term figure as an estimate.
What it leaves out
A different term, changes to loan structure and tax are not modelled. A valuation may also change your loan-to-value ratio, which can affect the rate.
What this calculator does not do
- Same term for both loans
- Constant rate assumed
- Costs as you enter them
- An estimate, not advice
Common questions
When should I refinance?
When the saving over the time you keep the loan exceeds the cost of switching.
What is a break fee?
A charge for leaving a fixed rate early, based on the lender's lost interest.
Is cashback free money?
Not always. It may be repaid if you leave within a set time.
Does a longer term help?
It lowers the repayment but raises the total interest.
Can my bank match the lower rate?
Often, if you ask, which saves the switching costs.
Where these numbers come from
- Sorted — Retirement Commission money guidance Independent guidance on borrowing, saving and debt
Method last reviewed 2026-10-28 This calculator uses fixed rules rather than rates that change, and its method is re-checked against the sources above at least once a year. Out of date? Tell us and we will fix it.
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