There are a few things that make a Kiwi homeowner’s heart skip a beat, quite like getting that letter from the bank saying: "Your fixed mortgage term is about to expire." If you are staring down an upcoming 2026 mortgage renewal, you are probably asking yourself the golden question: Should I fix or float my mortgage? How long should I fix it for?

With the cost of living and shifting Official Cash Rate (OCR) updates keeping everyone on their toes, making the right choice right now is crucial. But don't stress - you don't need a finance degree to figure it out. You just need a straight-up guide to your options.

Here is how to navigate refixing your mortgage in NZ this year.

Option 1: The Fixed-Rate Mortgage (The "Set and Forget" Approach)

When you fix your mortgage, you lock in a specific interest rate for a set period - usually anywhere from 6 months to 5 years.

The Pros:

• Certainty: You know exactly what your repayments will be every single fortnight or month. This makes budgeting a breeze.
• Protection: If mortgage interest rates in NZ suddenly spike, you are completely protected from the increase until your fixed term ends.

The Cons:

• Lack of Flexibility: If you suddenly get a bonus at work or an inheritance and want to pay off a huge chunk of your loan, your bank will likely charge you a "break fee" for paying it off early.
• Missing Out on Drops: If interest rates drop significantly, you are stuck paying the higher locked-in rate until your term expires.

Option 2: The Floating-Rate Mortgage (The "Go With the Flow" Approach)

A floating (or variable) rate moves up and down depending on what the market and the Reserve Bank are doing.

The Pros:

• Total Flexibility: You can make extra lump-sum repayments or pay off the entire mortgage at any time without facing any nasty break fees.
• Immediate Savings if Rates Drop: If the bank drops its floating rate, your minimum repayments decrease immediately.

The Cons:

• Unpredictability: If rates rise, your repayments rise. This can make it hard to manage tight household budgets.
• Historically Higher Rates: Floating rates are generally higher than short-term fixed rates, meaning you often pay a premium for that flexibility.

The Secret Weapon: Splitting Your Mortgage

Here’s a little secret: when deciding whether to fix or float your mortgage in NZ, you don't actually have to pick just one.

Many savvy homeowners choose to "split" their home loan. For example, you could fix 80% of your mortgage for 2 years to give yourself budget certainty, and leave the remaining 20% on a floating rate. This allows you to apply any extra savings or work bonuses to the floating portion without incurring penalty fees.

You can even split your loan into multiple fixed terms (e.g., half fixed for 1 year, half fixed for 3 years) so that your entire mortgage isn't up for renewal at the same time.

How to Decide What's Right for You in 2026. 

There is no "one size fits all" answer. The right choice depends entirely on your personal situation:

• Plan to sell soon? A floating rate or a very short fixed term might be best, so you don't get stung with break fees when you sell the house.
• Tight budget? Fixing gives you peace of mind knowing exactly what is going out of your account each week.
• Expecting extra cash? Splitting your loan gives you the flexibility to pay down debt faster.

Don't Just Accept Your Bank's First Offer.

When your fixed term is up, your current bank will usually send you an offer by mail or via your banking app. Do not just click accept. Banks rarely automatically offer their absolute lowest rates to existing customers. By partnering with an expert mortgage broker, we can negotiate with your current bank to secure a better rate or explore other lenders to see if refinancing could save you thousands. Even if staying with your current bank turns out to be your best option, our team can often get you retention cash for remaining with them for another term.

Frequently Asked Questions

When should I start looking to refix my mortgage? You should start reviewing your options about 60 days before your current fixed term expires. This gives you plenty of time to negotiate rates or arrange a bank switch without feeling rushed.

Does it cost money to use a mortgage broker to refix? No! Our service is completely free to you. If you choose to refix or refinance, the lender pays us a commission. You just get the expert advice and the sharpest rates.

Can I switch banks when my fixed term ends? Absolutely. The end of a fixed term is the perfect time to switch banks without paying break fees. We can help you compare cash-back offers and interest rates to see if moving banks is worth it. And if staying with your current bank turns out to be the best option for you, let us play hardball with the bank to get you some retention cash.

Ready to secure the best rate?

Everyone needs a Buddy when it comes to the banks. If your mortgage is up for renewal, don't tackle it alone. Contact the team at Buddy Mortgages today for a free chat, or use our NZ Mortgage Calculator to see how the latest rates could change your repayments.