Is It Time to Refix? A Taranaki Borrower’s Guide to Fixed vs Floating
Is It Time to Refix? A Taranaki Borrower’s Guide to Fixed vs Floating
If your fixed rate is coming up for renewal, the letter from your bank can feel like it’s asking you to make a snap decision. It isn’t, and treating rollover day as a deadline rather than an opportunity is where most Taranaki homeowners leave money on the table.
What Happens If You Do Nothing
If your fixed term ends and you haven’t chosen a new rate, your loan doesn’t pause, it rolls onto the bank’s floating rate automatically, which is typically well above what a competitive fixed rate would cost you. Floating on purpose, as a short-term strategy, is fine. Floating by accident because the renewal email got buried is just an expensive default.
The Refix Timeline That Actually Works
Between 30 to 60 days out, most banks will let you lock in a new rate in advance and will usually email you a “special” offer. Treat this as an opening position, not the final word, it’s worth comparing before you accept it.
In a rising rate environment, it generally pays to lock in earlier rather than later. This gives you enough time to properly compare the whole market, your bank’s offer against what other lenders are offering, including any cashback and/or retention cash for switching ideally, the earlier the better, before rates move again.
In a falling rate environment, the opposite logic applies, it can pay to hold off and wait until closer to, or even on, your actual rollover day before fixing, since rates may keep easing in your favour the longer you wait.
Rollover day itself is also the cheapest possible time to restructure. There’s no break fee to worry about, you can make one off lump sum payments to the loan without penalties, and you have full freedom to change your loan term, split it differently, or move banks entirely. You don’t have to pick just one rate.
Many borrowers assume that refixing means choosing a single term for the entire mortgage. In practice, splitting, is one of the more useful tools available. For example, on a $600,000 mortgage you might fix part on a 1-year term, part on a 2-year term, and leave a smaller portion floating for flexibility to make extra repayments. This spreads your risk across the rate cycle rather than betting everything on one decision.
Fixed, Floating, or Split — Which Fits You?
- Fixed suits people who want budgeting certainty and would lose sleep over a rate rise.
- Floating suits people who want flexibility, extra repayments, an upcoming sale, or the ability to move fast if a better deal appears, and can absorb some rate movement.
- Split suits most people in between, giving part certainty and part flexibility.
Negotiating Rather Than Accepting the First Offer
Advertised rollover rates are rarely a bank’s best offer, retention teams generally have room to move, especially once they know you’re comparing the market or working with an adviser. Banks price for inertia, the borrowers who push, or who present a competing offer, are usually the ones who end up with a sharper rate.
Why Taranaki Borrowers Benefit From Local Advice Here
Banks publish their rates and update these regularly, but what a specific lender is actually prepared to offer a specific borrower, with a specific equity position, in a specific Taranaki suburb, changes week to week. Part of working with a local adviser is having live visibility of which banks are being genuinely competitive on refixes and cashbacks right now, rather than relying on the headline rate advertised on a bank’s homepage.
Frequently Asked Questions
What happens if I don’t refix in time? Your loan rolls onto the bank’s floating rate, which is usually higher than a competitive fixed rate. You can still refix afterwards, you just may have paid more floating in the meantime.
Can I switch banks when I refix, or am I stuck with my current lender? You’re free to switch banks entirely at your rollover date without a break fee, and may be eligible for a cashback incentive for moving your lending.
Is splitting my mortgage more complicated to manage? Not significantly, it’s simply structured as separate portions within the same overall loan, each with its own rate and term, and your adviser or bank can set this up as part of the refix.
Coming Up for Renewal? Let’s Look at the Whole Market First
Before you click “accept” on whatever your bank emails you, it’s worth a quick conversation to see what else is available and whether your current structure still suits where you’re at. Get in touch and we’ll walk through your options ahead of your renewal date.
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