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.

The question

Is it worth breaking my fixed-rate mortgage to capture a lower carded rate?

Factors that matter

› Remaining balance on the fixed portion of your loan
› Months remaining on the fixed term
› Your locked-in fixed rate
› The bank's current wholesale rate for the remaining term (banks use B2 swap rates from RBNZ)
› The savings differential between your locked rate and any new rate you'd refinance into
› Legal + valuation fees on the new loan ($500–$1,500 typical)

Worked example (illustrative)

A borrower with $500,000 fixed at 6.50% with 18 months remaining, considering a switch to 4.99%. Indicative break cost: ($6.50% − 4.50% wholesale equivalent) × $500,000 × 1.5 years ≈ $15,000. Refinancing saves ~$11,300 over 18 months. The breakeven favours holding the fixed rate. (This is illustrative — every lender uses slightly different wholesale-rate references; ask for an exact quote.)

Talk it through with an adviser

Your numbers matter — an adviser from Evolve Group Limited (FSP711891) can model this scenario against current carded rates and your servicing position.

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Important: how to read this information

This website is operated by Evolve Group Limited (FSP711891), a Licensed Financial Advice Provider regulated by the Financial Markets Authority (NZ). The information published here is general in nature and is not personalised financial advice. For personalised advice that takes your circumstances into account, request to be matched with one of our licensed mortgage advisers via the enquiry form.

Rate accuracy. Rates shown across this site were observed at 21 May 2026, 12:27 pm from each lender's published carded-rate page (linked per row). If a lender has updated their rates since that timestamp, the authoritative source is the lender's page, not our derived snapshot. Carded rates are advertised rates — the rate you ultimately receive depends on your application.

CCCFA + Responsible Lending Code. Final lending decisions are made by the lender under the Credit Contracts and Consumer Finance Act 2003 and the MBIE Responsible Lending Code. Lenders apply servicing-test rates (typically around 8% post-2023), debt-to-income caps (RBNZ DTI 6× owner-occupier / 7× investor from 2024), and Loan-to-Value Ratio limits. Carded rates are not an offer or a pre-approval.

Disputes. If you have a complaint about advice received through this site, contact Financial Services Complaints Limited (FSCL) on 0800 347 257 or info@fscl.org.nz.

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