Mortgage Refinancing

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Have your financial circumstances recently changed? Are interest rates fluctuating? Or is your fixed term interest rate ending soon? If you’re like many homeowners in any of these situations, you may be thinking about refinancing your mortgage.


Mortgage refinancing involves taking out a new home loan to pay off your original home loan. In many instances, refinancing a mortgage allows homeowners to take advantage of lower interest rates, cash out some of their home’s equity, or even reduce their monthly mortgage repayments to help with the household budget.


Before you start the mortgage refinance process, however, it’s good to know both the benefits and the obstacles of refinancing and how the process works.



How does mortgage refinancing work?


Refinancing a mortgage is not that different to getting a mortgage in the first place. Start by shopping around and comparing lenders – or work with a Mortgage Adviser who will shop around on your behalf and help you to make an informed decision.


Compare current market offerings with your existing mortgage to see how it stacks up. If your credit situation has improved since your mortgage was first approved, you may qualify for more favourable terms when you refinance your home loan.


Remember to factor in any extra fees you may be charged – like break fees if you break a fixed rate loan term early – as these could impact the overall cost of refinancing and offset any savings you may achieve with a home loan refinance.



When is the best time to think about refinancing?


There are many reasons why homeowners choose to refinance a home loan. Here are some:


  • When interest rates drop, refinancing a loan to a lower interest rate – by ending a fixed interest rate term early – could help you save money on interest costs and potentially reduce your monthly repayments or pay off your mortgage sooner.
  • To access the equity in a property to help pay bills, finance a large purchase, consolidate debt, or renovate or remodel your home.
  • When nearing the end of an existing fixed rate loan term – refinancing with a new fixed rate could help you avoid interest rate fluctuations and potentially secure a more favourable rate or better loan terms.
  • It’s a good time to review your current home loan and decide if a refinance makes sense when your personal situation changes – whether that’s a change to your income, a desire to buy an investment property or holiday home, illness or redundancy, a divorce or separation, retirement, helping the kids get started or anything that impacts how much you can afford to pay.
  • To ensure your existing mortgage is competitive whether this be in terms of interest rates, loan product and structure, or obtaining cashbacks for moving your mortgage. Our Mortgage Advisers ensure our customers are always on the most competitive mortgage deal.



Should I refinance my mortgage?


Securing a mortgage with a lower interest rate is one of the best reasons to refinance a home loan, as it saves you money over the life of your loan. But there are few other good reasons too:


  • Restructuring your home loan to pay off your home loan faster or reduce your monthly repayments.
  • Switching from a floating rate to a fixed rate – or vice versa – or a combination of both, provides you with the right balance of flexibility and stability.
  • Accessing the equity in your property to help pay for unexpected expenses like medical treatment or repairs to your home.
  • Refinancing to take advantage of another lender’s products or services that could benefit your lifestyle.
  • Consolidating debts outside your mortgage into your mortgage to enable more affordable repayments. Sometimes our clients do this a little late and they start ‘slipping’ on repayments or start to default. Even if this is the case, we can help with a bad credit home loan to get things reset for you and give you that second chance to get back on your feet.



What should I consider before refinancing?


There are a number of good reasons to refinance, but it’s just as important to understand the downfalls. Here are some of the things to think about before you decide to refinance a mortgage:


  • Lengthening the loan term could mean you pay more interest over the life of the loan.
  • Cashing out the equity will result in a higher loan amount on the new mortgage, which could increase your monthly repayments or lengthen your loan term.
  • The cost of switching lenders – break fees, cash reward clawbacks, legal costs, new valuations and application fees – could offset the potential savings of a refinance.
  • Refinancing may end longstanding relationships with existing lenders.



Refinancing your mortgage with help from Max Mortgages


Refinancing a mortgage is not an easy decision. But having the right knowledge and a Mortgage Adviser like those at Max Mortgages to help guide you through the process, means you can make an informed decision that will positively impact your financial future.



At Max Mortgages, we work with a wide range of mortgage lenders across NZ, including all the main banks and many specialist non-bank lenders, to ensure you have the choice and flexibility when refinancing your home loan. Not only does this improve your chances of getting a refinance application approved, but it also suggests you’re much more likely to find a refinance mortgage product that will suit your specific needs and budget.


What’s more, when you partner with us, your financing options are not limited to home loan products. If you don’t want to break your home loan, our Personal Lending Team at Max Loans can also assist with a separate personal loan to help you meet your financial needs and goals. Often a personal loan through us can be approved within 24 hours, so it may be more suitable if you need money fast for unexpected expenses, such as urgent house repairs or renovations, medical emergencies and funerals. In addition, as a personal loan typically has short repayment terms, it may also help you save money on the total interest you will pay over the life of your loan. In fact, instead of rolling debt into their home loan, many of our customers use a personal loan to consolidate debt or make a big purchase, and then pay the loan off over a short-term period to save on interest costs. However, just be aware that generally the minimum repayments will be higher with a personal loan than a home loan product of a similar amount.  This can make a big difference in your decision if there is no wiggle room in your budget. Which financing option to go for really depends on your financial situation and needs. To discuss your needs and options, give us a call on 0800 ASK MAX (0800 275 629) today!



When you choose to partner with us, you’ll benefit from our industry knowledge and gain access to up to date information. This may include the latest mortgage interest rates and application criteria for different lenders, and which home loan products include features that will be most beneficial to your current situation. We will help you understand the pros and cons of refinancing and do the sums to help you evaluate whether refinancing is right for you.



Refinancing your home loan can be hard work – it involves a lot of paperwork, and a small mistake could prevent you from getting a mortgage approval. Handing this responsibility over to an experienced Mortgage Adviser is one of the easiest ways to ensure that everything is filled out correctly before your refinance application gets submitted to a lender. Let us help you with all the paperwork and guide you through the entire process to ensure your transition from your existing mortgage to your new one is without hassle!



When you arrange your home loan with us, we hope this is the start of a lifetime relationship. We will stay on hand to offer advice and support whenever you need it. We will also provide regular reviews of your home loan to help ensure that your loan is still the best fit for you and your unique needs. If you refinance to borrow money to use for renovations, our Insurance Advisers at Max Insurances can also help review your house insurance to ensure your cover is up to date after your renovation has been completed.



Contact Max Mortgages


If you’re looking for advice about a mortgage refinance, bad credit mortgage, or just need general advice about home loans NZ, please get in touch. Call us on 0800 ASK MAX (0800 275 629) or email us to arrange a free, no-obligation chat.