Fixing or Refixing Your Mortgage: 3 Questions to Ask Before You Lock In
Fixing or refixing your mortgage might not feel exciting—but it’s one of the most valuable opportunities you’ll have to realign your home loan with your life. It’s a chance to check in on your goals, reduce risk, and make sure your mortgage is working for you—not the other way around.
So before you lock in that rate, here are three important questions to ask yourself (and your mortgage adviser).
1. What’s the Interest Rate Outlook—And How Much Certainty Do You Need?
The first thing to consider is both external and personal:
Externally: What are interest rates likely to do? Are we at a peak, or is there room to move?
Personally: How much certainty do you want in your monthly repayments?
Fixing your mortgage for a longer term gives you peace of mind that your repayments won’t go up if interest rates rise. On the other hand, locking in a high rate for too long might mean missing out if rates drop again.
Some borrowers prefer a shorter fixed term or even a floating rate to stay flexible. Others value long-term predictability, especially if budgets are tight.
Your mortgage adviser can walk you through what the market’s doing—but ultimately, this comes down to your own risk tolerance and financial priorities.
2. When Do Your Other Loan Accounts Roll Over?
If you’ve got more than one mortgage account, spacing out your refix dates can help protect you from rate shock in the future.
For example, if you have one portion of your mortgage due to refix in 12 months, you might choose to refix the other portion for 18 months or two years. That way, not all your loans come off fixed rates at the same time—and you’re not hit with multiple increases all at once.
This is a great strategy to build long-term stability into your home loan structure.
3. What’s Changing in Your Life Over the Next 1–2 Years?
This is where your mortgage should reflect real life. Before you refix, ask yourself:
• Are you planning to sell your house?
If there’s even a chance, speak to your adviser about break fees. Selling during a fixed-term period could mean a financial penalty. One option is to fix for a shorter term or float temporarily while you firm up your plans.
You can request an estimate of break fees from your bank—don’t worry, they won’t hold it against you! Just remember: quotes are usually only valid for 24 hours.
• Is your income likely to change?
Whether it's a pay rise, new job, commission income, or redundancy risk, your income matters. In uncertain times, it might make sense to:
Fix repayments at a lower level for predictability
Use revolving credit to reduce your mortgage while keeping access to funds
Request interest-only repayments for a short time (in certain circumstances)
• Do you have savings—or expect a lump sum soon?
Now’s the time to consider a lump sum payment toward your mortgage. When you refix, you usually won’t incur break fees for this. Reducing your principal before locking in a new rate can lower your overall repayments and total interest.
If you have a revolving credit account, consider pulling funds from there to make a lump sum payment, then rebuilding the revolving facility again.
And if you’re expecting a bonus or windfall, ask your adviser whether your bank allows extra payments during a fixed term—or whether a different lender might be more flexible.
• Are you starting a family?
This is a big one. Reduced income or increased household costs can make higher repayments tricky. Make sure your refix structure allows for affordability during parental leave or reduced hours.
Use tools like Sorted.org.nz to model your future budget.
Bonus Tip: Ask About Flexible Features
Most lenders allow you to increase your repayments by up to 20% without penalty—even during a fixed term. So if you think your income might increase, this is a great way to pay off your mortgage faster. Just be aware: once you increase your repayments, you can’t reduce them again until the fixed term ends.
Don’t Refix Alone
Refixing your mortgage might not grab headlines like buying a house—but done well, it can save you thousands and build long-term financial strength.