Refinance home loan | How to Refinance Mortgage NZ | NZHL (2024)

So, you’ve come to the end of your mortgage term and you’re considering refinancing. How does it all work? Read on to learn why, when, and how to refinance your mortgage.

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Talk to an NZHL Mortgage Mentor to see if refinancing is right for you.

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Refinancing could help you achieve your goals

For most, paying off your home loan as quickly as possible is the ultimate goal, and we believe refinancing with us could help you get there. When exploring your options, it's important to chat with the experts. An NZHL Mortgage Mentor can help simplify the home loan process and ensure your structure is working best for you.

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The Benefits of Refinancing

As our circumstances change, so should our mortgage. There are many benefits to refinancing a mortgage, including:

  • Customising your structure to suit your current needs
  • Locking in a lower rate and saving on interest costs
  • Accessing the benefits of a new lender
  • Consolidating your debt
  • More control over your finances

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Let’s get back to basics

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What is refinancing?

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Why should I refinance?

It’s important to adjust your loan to suit your current needs. By refinancing, you could save on interest costs, get better support, consolidate your debt, and more!

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When to refinance?

If your mortgage is up for renewal, or if you’ve had a change in circumstances (e.g. income increase), this is a great time to consider your refinancing options.

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Why work with a Mortgage Mentor when refinancing?

While refinancing may be a great option for you, it can still be a complex process to navigate. An NZHL Mortgage Mentor will demystify the refinancing process and help you find the best, most personalised, solution for you.

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About Us

NZHL is a purpose-driven (financial freedom faster) home loan and insurance adviser network. We are passionate about helping Kiwis with their homeownership goals and finding the right solution for their needs alongside sensible insurance protection.

And those aren’t just aspirational words – that’s actually what we do. As a proudly Kiwi-owned and operated business, we help over 50,000 Kiwis collectively save millions in interest costs each year. *

We do this by taking a structured, personalised approach: providing coaching and support via our NZHL Mortgage Mentors, creating tailored smart home loan plans, and access to DebtNav, our online monitoring tool which helps our clients take control of their finances and stay on track to paying off their loans faster.

Whether you’re refinancing your mortgage, looking at investment property options, or looking to get on the property ladder in the first place, NZHL is the group of experts you want in your corner.

*This figure is an estimate based on actual balances of current clients at the NZHL floating interest rate and the expected loan balance based on advertised bank interest rates.

How do I refinance a mortgage?

Talk with a financial expert first to see if refinancing is the best choice for you. Our NZHL Mortgage Mentors can assist you throughout the process; from research to considering your options, weighing up the costs, to applying for a loan with a different lender.

What does refinancing involve?

Refinancing involves a bit of research first. Seeing what’s out there with different lenders and rates, and weighing up if the benefits outweigh the costs, is important. An NZHL Mortgage Mentor can help you navigate this. You’ll also need to get all your documentation in order and apply for a new home loan with the new lender.

How much does it cost to refinance a mortgage?

There may be some costs to refinancing your mortgage, but the long-term saving of interest could make this well worth it. Refinancing costs may include legal fees and early break fees (if you’re breaking from your current lender before renewal time). Talk to your current lender to see what your costs will be.

What makes NZHL different?

NZHL offers a personalised approach to our clients. We don’t just help you get your mortgage and then you never hear from us again – we’re here to support you throughout your entire home ownership journey. From personalised plans to our online DebtNav system, our advice and tools are here to help you find financial freedom, faster.

What’s involved in a free chat?

Your free chat will take up to 1.5 hours during which we will talk about where you are at right now in your current mortgage and where you would like to be (your goals). We will discuss things like your income and expenses and how they may impact your home loan refinancing options, so it is helpful to have that information on hand too.

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See how much you could save on your mortgage with our home loan comparison calculator.

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Refinance home loan | How to Refinance Mortgage NZ | NZHL (2024)

FAQs

Is it hard to get approved for a refinance? ›

To be approved for a conventional mortgage, you typically need a minimum 620 credit score. If your score is below the mid-600s, however, you may have a harder time qualifying for a refinance. Your credit score can change over time.

How much of your mortgage can you refinance? ›

Many lenders cap cash-out refinancing at 80 percent of the home's total value on most loan types. Ideally, you'll also get a lower rate in the process.

What is the first step in refinancing? ›

Step 1: Set a clear financial goal

There should be a good reason why you're refinancing a mortgage, whether it's to reduce your monthly payment, shorten your loan term or pull out equity for home repairs or debt repayment.

How long does it take to complete a mortgage refinance? ›

There's no exact time limit on how long a refinance can take. However, most refinances close within 30 to 45 days of applying for the refinance loan. While lots of refinancing tips can help the refinance process go smoothly, you can take a few steps on your own to speed up the process.

What disqualifies you from refinancing? ›

Your lender may disqualify you from refinancing your mortgage if you carry too much debt. Your debt-to-income ratio must meet your lender's thresholds for you to qualify. Having a low credit score may also prevent mortgage lenders from approving your application.

What does the bank look at when refinancing? ›

An Adequate Credit Score

Lenders look at your score to determine how likely you are to repay your debts. Your current credit score also determines whether you're eligible for a refinance and the mortgage rate you can get. Just like with your original mortgage, the higher your credit score, the better your rate.

What not to do during refinance process? ›

Rushing in to the decision to refinance may not benefit your financial situation, so take time to avoid these eight mistakes.
  1. Failing to do your homework. ...
  2. Assuming you're getting the best deal. ...
  3. Failing to factor in all costs. ...
  4. Ignoring your credit score. ...
  5. Neglecting to determine your refinance breakeven point.
Oct 27, 2023

What is the general rule for refinancing a mortgage? ›

One of the best and most common reasons to refinance is to lower your loan's interest rate. Historically, the rule of thumb has been that refinancing is a good idea if you can reduce your interest rate by at least 2%. However, many lenders say 1% savings is enough of an incentive to refinance.

What credit score is needed to refinance a house? ›

What credit score is needed to refinance a house?
Loan typeMinimum score
Conventional refinance620
Jumbo refinanceGenerally 700 or higher
FHA refinance580
VA refinanceNo credit minimum from VA, but generally 620
2 more rows
Apr 26, 2024

How much does mortgage refinancing cost? ›

The cost to refinance a mortgage ranges from 2% to 6% of your loan amount, and you can expect to pay less to close on a refinance than on a comparable purchase loan. The exact amount you'll have to pay depends on several factors, including: Your loan size. Your lender.

What happens at a refinance closing? ›

You'll be asked to review and sign several documents, including affidavits and declarations. Be sure to read all documents carefully and understand their purpose as they are legally binding. When everything is signed and completed, you'll leave the office with a new loan, including a new rate and term.

How fast can you close on a refinance? ›

How long it takes to refinance a house by loan program
Refinance programTime to close
Conventional loan42 days (6 weeks)
FHA loan46 days (6.5 weeks)
VA loan40-50 days (6-7 weeks)
Jul 1, 2024

What credit score is needed for a refinance? ›

What credit score is needed to refinance a house?
Loan typeMinimum score
Conventional refinance620
Jumbo refinanceGenerally 700 or higher
FHA refinance580
VA refinanceNo credit minimum from VA, but generally 620
2 more rows
Apr 26, 2024

How much income do I need to qualify for a refinance? ›

To qualify for a refinance, take a look at your debt-to-income ratio. The new monthly mortgage payment shouldn't be more than 30% of your monthly income. To refinance $400K over a 30-year fixed term with an interest rate of 3.5%, you'll need an income of approx. $6000/month.

What disqualifies you from refinancing a car? ›

If you bought a heavily used car or have racked up lots of miles and want to refinance the loan, you may not be able to. Lenders tend to have a cap of 100,000 to 150,000 miles. You may not qualify with an older car, even with fewer miles. Typically, lenders set a hard limit at 10 years old.

Is it easier to refinance or get a loan? ›

Refinancing is generally easier than securing a loan as a first-time buyer because you already own the property. If you have owned your property or house for a long time and built up significant equity, refinancing will be even easier.

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