Your guide to switching your home loan

When your fixed-term home loan rate ends, your home loan provider will ask you to lock in a new interest rate that is available at the time. However, the end of your fixed-rate period is a great opportunity to reassess what you’re getting out of your current lender or take advantage of the benefits another home loan provider is offering.

In this guide, we’ll take you through the key things to consider when switching or 'refinancing' your home loan and the steps involved to switch providers.

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5 things to consider before switching providers

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1. Different interest rates and benefits

One of the biggest advantages of switching home loan providers is getting to access the offers and benefits that your current provider may not offer. The main factors that are considered when switching providers are the interest rate and upfront cash contribution.

As the current market is competitive, you may not see a major difference in the rates and upfront cash contributions offered by the major banks in New Zealand.

However, in addition to a great rate and any upfront cashback, a dosh home loan also gets you access to a loyalty reward that offers an annual cashback payment paid every year you stick with dosh. For example, if you refix a $600k loan with dosh you could earn a first-year payment of $714 and total earnings of $13,487 over a 30-year loan. This loyalty offer is exclusive to dosh and cannot be accessed via a broker.

You can see how much your annual cashback payment would be using our calculator.

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2. Break fees (if you’re within your fixed period)

If your fixed rate hasn’t expired yet, your current bank may charge you a break fee if you switch before your fixed period comes up. The closer you are to your fixed term end date, the lower the break fees.

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3. Legal fees

You will need to pay legal/conveyancing fees for a lawyer to transfer your home loan to the new provider and handle the settlement of the new loan. Often the amount of upfront cashback that may be offered to you will be able to cover the legal fees.

Dosh can recommend a lawyer who can complete the documentation process digitally with pricing starting from $1,280.00 for an individual and $1,310.00 for a couple including GST.

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4. Cashback clawbacks

If you have received cashback from your current provider, you may need to pay some of it back if you’re looking to refix before the end of your cashback term (often this term is 3 years with New Zealand providers).

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5. Lining up the new provider for when your current fixed term expires

You will want to apply with your new provider about a month before your current fixed term expires. That way you can line up the switching date with the date your current fixed term expires to reduce the time your current loan will be on floating. Once you have applied, the banks and your solicitor will manage the paperwork.

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Steps for switching home loan providers

Step 1: Review your current home loan

• Check your current interest rate, loan balance, and refix date
• Ask your lender if any break fees will apply if you are looking to switch before your refix date
• Review your goals: What are you looking to get out of a different bank? Lower repayments, flexibility, extra benefits?

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Step 2: Compare other providers

You can use tools like interest.co.nz or sorted.org.nz’s mortgage calculator to compare details such as:

• Interest rates
• Fixed vs floating
• Cashback offers for switching
• Annual cashback that rewards loyalty (only offered by dosh)
• Loan features (top ups, lump sum repayments)

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Step 3: Apply with the new provider

You’ll need to provide details such as:

• PhotoID (passport or driver’s licence)
• Income
•  Expenses and debt summary
• Recent bank statements

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Step 4: Get conditional approval

Your new potential provider will assess your application and provide a conditional letter of offer if your application is successful. The letter of offer will include their current interest rates and any additional offers such as upfront cashback.

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Step 5: Engage your lawyer

Your lawyer will manage the transfer of the home loan, register the new home loan on your title, notify the previous lender and settle the new loan.

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The opinions expressed in this guide should not be taken as financial advice, or a recommendation of any financial product. 

The dosh Streak payment example is indicative only, assuming an interest rate of 5.19% and offer term sand conditions being met each year. The dosh Streak payment is in no way linked to Westpac who hold no liability in relation to the Dosh streak example or Dosh streak payments. Dosh Home Loans are approved, issued and managed by Westpac and promoted by Dosh. The Streak cashback is subject to terms and conditions and provided exclusively by Dosh. Lending and eligibility criteria and terms and conditions apply.