Coming Off a Fixed Rate? What to Know Before you Lock in Again
If your fixed-rate mortgage is due to expire in the next few months, you’re not alone - and you’re definitely not the only one wondering what the smart next move is…
Thousands of Kiwi homeowners are rolling off fixed mortgage rates that were locked in back when money was cheap. Now, with rates significantly higher, many are facing a jump in mortgage repayments and a fair bit of uncertainty.
The good news? You’ve got options.
The not-so-good news? There are a few traps to avoid - and making the wrong move could cost you thousands, or put pressure on your household budget down the track.
Let’s break it down…
START PLANNING AT LEAST TWO MONTHS OUT
This is one of the biggest things I want to get across: don’t leave it until the last minute.
If you’re considering switching banks to get a better deal, it’s important to know that mortgage refinancing isn’t instant. Even with everything going smoothly, it can take five weeks or more for a new loan to be approved, signed, and settled - especially if things are busy on the banks’ end.
Two months out gives you time to:
Compare rates and offers across lenders
Negotiate with your current bank (yes, you should!)
Get all the paperwork sorted
Avoid floating by default
Of course, if you ask us to help you with your mortgage re-financing, we’ll do most of this legwork for you (and generally just make the process smoother and speedier) but you’ll still want to chat with us at least 8 weeks before your fixed rate is due to expire.
Leave it too late, and even with a mortgage broker’s help, your fixed rate could expire before a new loan is in place - meaning you might end up floating at a much higher rate, even just for a few weeks. And that can sting.
CASH CONTRIBUTIONS CAN SWEETEN THE DEAL… BUT WATCH THE CLAWBACK
Banks are competing again, and some are offering cash contributions to attract new mortgage customers. That can be a great bonus - money in your pocket to help with legal fees and mortgage refinancing costs, or just to take the edge off.
But a quick word of caution:
If you received a cash contribution from your current bank in the last 2–3 years, you may still be within their clawback period - meaning if you leave early, you might be required to repay that cash.
It’s not always a deal-breaker, but it’s something we, as mortgage brokers, need to factor into the equation when comparing options for you. Sometimes staying put and restructuring can be just as effective, depending on your goals.
THE TRAP OF ONLY CHASING THE LOWEST RATE
It’s tempting to just go with the cheapest fixed rate you see. Usually, that means locking in your mortgage repayments for 1 or 2 years - and it might look like the smart play on the surface.
But what happens when that short-term rate ends?
We’ve seen this movie before. People locked in low rates in 2020 or 2021 - and then got hit hard when rates climbed sharply. Their repayments jumped by hundreds of dollars a fortnight, and for many households, it caused serious financial stress.
The lowest rate isn’t always the safest option.
It might work if rates fall in the future - but if they stay high or climb further, you could be staring down a steep increase in repayments with no warning and no buffer.
RATE RISK MANAGEMENT: FIX FOR NOW AND LATER
This is where a good interest rate risk management strategy comes in. It’s not about trying to predict the market (no one can), but about managing uncertainty and giving yourself some breathing room.
That might look like:
Splitting your loan into chunks with different fixed terms (e.g. some for 1 year, some for 3–5 years)
Fixing part of the loan for longer, to give stability for at least part of your repayments
Leaving a portion on floating or offset, if you’ve got flexibility or funds to pay it down
The goal is to balance certainty, flexibility, and cost — not just win a rate war today, but avoid a financial punch in the gut tomorrow.
(By the way – if this sounds like something you’d be interested in looking into, click here to get in touch with us. Crunching the numbers for these sorts of risk management strategies is something we really enjoy as mortgage brokers.)
SO, WHAT SHOULD YOU BE DOING RIGHT NOW?
If your fixed term is expiring soon, here’s your action plan:
Mark the expiry date on your calendar
Start reviewing your mortgage options ~8 weeks out (or contact us!)
Check for any cashback clawbacks on your current deal
Compare rates across multiple banks - not just your current one
Get help building a loan structure that suits your life, not just the interest rate sheet
Don’t just chase the cheapest rate - make a smart plan. Your future self will thank you for it.
NEED A HAND?
This is what I do. I help people look beyond the rates and structure their mortgage in a way that gives them confidence, flexibility, and long-term peace of mind.
If you’ve got a fixed rate ending (or if you’re already on floating and unsure what to do) let’s talk. You’ll get clear, honest advice from a senior mortgage broker who knows the game and puts your interests first.
Click here to send us a message (or just give us a call) and we’ll get things moving.
Our blog is not intended to be taken as personal advice
and is for informational purposes only.
Before acting on this information, contact WealthHealth mortgage brokers
to ensure it is suitable for your circumstances.