What Is Refinancing?

Refinancing means replacing your existing mortgage with a new loan — either with the same bank or a different lender. The goal is usually to lower your interest rate, change your loan structure, or access equity in your home.

In NZ, refinancing is extremely common. Thousands of homeowners switch lenders each year and save significantly. The process is handled almost entirely by your mortgage broker (Finch) — you mostly just sign documents.

When Should You Refinance?

The best time to refinance is when your fixed rate period expires — at this point, you can switch lenders without paying break costs. Other good reasons:

  • Rates have dropped significantly since you fixed
  • Your financial position has improved (higher income or more equity)
  • You want to consolidate debt
  • You need access to equity for renovations or investments
  • You're unhappy with your lender's service
Finch Tip: Set a calendar reminder 60 days before your fixed rate expires. This gives you time to compare options, apply, and have your new loan ready before the rollover date — avoiding the high floating revert rate.

Understanding Break Costs

If you want to refinance while on a fixed rate, your current bank may charge a break fee (also called early repayment cost). This compensates the bank for expected interest income you're cutting short.

Break costs are calculated based on:

  • Outstanding loan balance
  • Remaining fixed term
  • Current wholesale interest rates vs your rate

Finch calculates your estimated break costs upfront and compares them to your projected savings — so you only refinance when it definitively makes financial sense.

How to Refinance Step by Step

The typical NZ refinance process with Finch:

  • Day 1: Free savings review — we assess your current loan and estimate savings
  • Day 2–3: Lender comparison — we search 20+ lenders and present top options
  • Day 4–7: Application lodged, conditional approval issued
  • Day 7–14: Documents signed, settlement coordinated
  • Day 14–21: Loan transfers, you start saving money

What Documents Do You Need?

  • Last 2 payslips (or 2 years tax returns if self-employed)
  • Recent bank statements (3–6 months)
  • Current mortgage statement
  • ID and proof of address
  • Rates notice (for property value)

Finch prepares and manages all documentation on your behalf. Most clients spend less than 2 hours on paperwork total.