Refixing in 2026: A Decision Framework (Split, Float, or Fix Longer?)

This guide gives you a simple decision framework you can use whether you’re refixing a single loan, juggling multiple splits, or considering refinancing.

For the wider context (what happened in 2025 and what we’re watching in 2026) you can start with our full analysis here.

Where rates are sitting entering 2026 (and why refixing feels different this year)

Special vs standard rates matter more than people realise

One of the most important “small print” points in refixing conversations is that many borrowers don’t actually get the headline carded rate. Banks often price sharper “special” rates for borrowers who meet conditions (typically stronger equity and servicing).

The Reserve Bank tracks both:

• New residential mortgage special interest rates (B21)

• New residential mortgage standard interest rates (B20)

As at the RBNZ’s 14 January 2026 release, specials for shorter fixed terms were sitting in the mid-4% range on average, while standard (carded) rates and floating were higher. That gap is why negotiation and structure matter.

The key idea for 2026: you’re managing uncertainty, not “picking the perfect rate”

In a falling-rate environment, the temptation is to wait for “the bottom.” In practice, refixing is usually about balancing:

• Certainty (budget stability)

• Optionality (ability to adjust later)

• Total cost (including fees, break costs, and any cashback clawbacks)

The refixing decision framework

Use these steps in order. The goal is to land on a structure you can live with even if the next 12 months surprise you.

Step 1: Start with your cashflow, not your forecast

Before terms and tactics, get clear on your non-negotiables:

• How tight is your budget today?

• Would a higher repayment create stress if something changed (income, expenses, tenant vacancy, etc.)?

• Do you need certainty for the next 12–24 months?

If the honest answer is “we need predictability,” that pushes you toward fixing more and for longer. If you have breathing room and flexibility matters, shorter terms and/or a portion on floating can make sense.

If you want a refresher on fixed vs floating trade-offs check out our guide:
https://www.newzealandmortgages.co.nz/blog/fixed-vs-floating-what-should-you-choose-when-refixing-your-home-loan

Step 2: Choose your “base structure” first, then fine-tune

Most borrowers end up in one of these structures:

Option A: Fix it all (simple, predictable)

Best for:

• Households prioritising certainty

• Tight cashflow

• People who don’t want ongoing rate decisions

Watch-outs:

• You might miss future decreases if rates drift lower

• Less flexibility if you want to repay lump sums or sell

Option B: Split terms (the most common “middle ground”)

Best for:

• Borrowers who want a hedge against uncertainty

• People who value flexibility but still want stability

How it works:

• You split the loan into 2–4 portions and stagger the refix dates (for example, part 1 year, part 2 years, part 3 years)

Why it’s powerful:

• You’re never “all in” on one rate at one point in time

• You can adjust strategy gradually as conditions change

Your full guide here:
https://www.newzealandmortgages.co.nz/blog/mortgage-laddering-how-to-optimise-your-home-loan-by-splitting-into-multiple-parts

Use our laddering calculator to build a clear picture:
https://www.newzealandmortgages.co.nz/calculators/laddering-calculator

Option C: Keep a portion floating (maximum flexibility)

Best for:

• Borrowers expecting to make lump-sum payments

• People who might sell, refinance, or restructure soon

• Borrowers who want the option to refix quickly if pricing improves

Watch-outs:

• Floating is usually higher than special fixed rates

• It can create budget volatility

A practical approach is “mostly fixed, some floating” rather than going 100% floating.

Option D: Use offset or revolving credit strategically (if you have surplus cash)

Best for:

• Borrowers with consistent savings buffers (or income that builds up in the account)

• People who want interest savings without locking money away

This is often a cashflow strategy rather than a rate strategy.

Review our buyer guide on this strategy here:
https://www.newzealandmortgages.co.nz/blog/mortgage-repayment-structures-explained-offset-vs-redraw-vs-standard-loan
And check out our offset calculator:
https://www.newzealandmortgages.co.nz/calculators/offset-mortgage-calculator

How to pick the term length (without overthinking it)

If you think rates might fall further

Instead of trying to time the bottom:

• Keep at least part of the loan on a shorter term (6–18 months), or

• Split across 1–3 year terms

This keeps you in the game if pricing improves, while still protecting your budget.

If you think rates could stabilise or rise again

If inflation stays stubborn or the easing cycle pauses, longer terms can look better in hindsight. In that scenario:

• Lock a portion longer for certainty (2–4 years)

• Keep a smaller portion short or floating for flexibility

A simple rule many borrowers like

• The “sleep at night” portion goes longer

• The “I can handle variation” portion stays shorter or floating

Timing: when to start your refix (and why early wins)

Start 60–90 days before your fixed term ends

Most banks allow you to lock in a rate ahead of time. Starting early gives you:

• More time to compare offers

• Negotiation leverage

• Options to restructure splits, add offset, or refinance if it stacks up

Don’t forget break fees and cashbacks

If you’re switching banks or making big changes, check:

• Break costs on current fixed portions

• Cashback clawback periods (if you received one previously)

• Legal fees and discharge costs (if refinancing)

If you’re considering refinancing in a falling-rate environment, this is your guide:
https://www.newzealandmortgages.co.nz/blog/refinancing-strategy-how-to-optimise-in-a-falling-rate-environment

Common refixing mistakes we see (and how to avoid them)

Mistake 1: Fixing everything on the shortest term because “rates will definitely drop”

Sometimes they do, sometimes they don’t. The safer move is a split approach so you’re not relying on one forecast.

Mistake 2: Choosing the lowest headline rate without checking the full structure

A slightly higher rate with a better structure (offset, better prepayment terms, better flexibility) can be a bigger win over time.

Mistake 3: Leaving it too late

Last-minute refixing often leads to “defaulting to whatever the bank offers” rather than creating genuine options.

Mistake 4: Not stress-testing repayments

Even if rates are falling, it’s still worth knowing what repayments look like if rates move the “wrong” way for a while.

Calculator that helps borrowers sense-check affordability:
https://www.newzealandmortgages.co.nz/calculators/mortgage-seviceability-calculator

Summary: the 2026 refixing playbook

The short version

• If certainty is your priority, fix more and consider longer terms for the “sleep at night” portion.

• If flexibility is your priority, split terms and/or keep a portion floating.

• If you hold real cash buffers, offset or revolving credit can reduce interest without betting on rate forecasts.

• Start early (60–90 days) so you can compare, negotiate, and structure properly.

• Always check the total cost: fees, break costs, and cashback clawbacks can change the best option.

Talk to an adviser

Refixing is one of those moments where small decisions compound. If you’d like a second opinion, our advisers can help you:

• Compare refix offers across banks and negotiate where it makes sense

• Build a split strategy that matches your risk tolerance and cashflow

• Decide whether offset, revolving credit, or a simpler structure is best

• Sense-check break fees and switching costs before you commit

Get in touch and we’ll walk you through your options.