NZ home loan scenarios
Worked examples for the situations NZ borrowers most commonly face.
How to Calculate the Cost of Breaking a Fixed-Rate Mortgage in NZ
If you're considering breaking a fixed-rate mortgage early — to capture a lower rate, sell, or switch lenders — the break cost is the deciding factor. NZ banks calculate it using the wholesale-rate differential method, which is the same methodology across all major lenders.
Should I Refinance My NZ Mortgage?
Refinancing in NZ is most common at the end of a fixed term (zero break cost) or when bank cashback offers create a positive switching economic. The decision turns on rate savings minus break cost minus legal + valuation fees, weighed against any cashback offered.
The New Build LVR Exemption in NZ
Properties purchased off-the-plan or within 6 months of Code of Compliance (CCC) are exempt from RBNZ LVR restrictions. This is the cleanest path to high-LVR lending for first-home buyers and investors who can find suitable new builds.
Low-Deposit Strategies for NZ First-Home Buyers
Three pathways for borrowers with less than 20% deposit: Kāinga Ora First Home Loan (5% deposit, eligibility-capped), lender low-equity margins (typically 0.25%-1.5% above carded), and the new-build LVR exemption. This page maps which fits which situation.
How NZ Banks Calculate Servicing for Investor Loans
Investor servicing tests are tighter than owner-occupier — banks discount rental income (typically 75% recognised), apply DTI caps (7×), and use higher test rates. This page explains the calculation and how the new interest-deductibility rules (from 1 April 2025) feed in.
Interest-Only Home Loans in NZ
Interest-only periods are available in NZ but limited — typically 5 years maximum for owner-occupiers and up to the lender's policy maximum for investors. Banks apply additional servicing tests for I/O because principal must still be servicable at expiry.