The Real Cost of Switching
Excluding break fees, the hard costs of a straightforward refinance in NZ typically land between $1,500 and $3,000. That covers legal fees (usually $800–$1,500), a property valuation ($600–$900, sometimes covered by the new bank as an incentive), and new loan documentation and bank discharge fees.
Break fees are the wildcard. If you're still in a fixed term and current wholesale rates have fallen below your fixed rate, breaking early can cost thousands. If rates have risen instead, the break fee is often minimal or zero.
Legal Fees
Valuation
Break Fees
Cashback offers commonly run 0.5%–1.0% of the new loan — on a $600,000 mortgage, that's $3,000–$6,000, often enough to cover the switching costs outright.
Don't Forget These When Doing the Sums
A full cost comparison needs more than just the interest rate.
Clawback terms
Cashback usually carries a 3–4 year clawback period; leaving early may mean repaying some of it.
Break fee estimate
Ask your current bank for a break fee quote before committing to a switch.
Net benefit over time
Weigh the total switching cost against the interest you'll actually save over the loan term.
Quick Summary
- Hard costs: typically $1,500–$3,000 excluding break fees.
- Break fees: can be zero, or thousands, depending on rate movements.
- Cashback: often 0.5%–1.0% of the loan, but watch the clawback period.