NZ Mortgage Fix vs Float Calculator
Compare New Zealand fixed and floating mortgage rates side by side. Enter your loan details and see the total interest cost, monthly repayments, and a clear recommendation on whether fixing or floating saves you more money over the full loan term. All calculations run privately in your browser.
Fixed vs Floating Mortgages in New Zealand
When you take out a home loan in New Zealand, you have two main options for how your interest rate is set. A fixed rate locks in a specific interest rate for a set term — typically one to five years. During that period, your repayments stay the same regardless of what happens to interest rates in the market. A floating (or variable) rate moves with the market, usually tracking the Reserve Bank of New Zealand's Official Cash Rate (OCR). Your repayments can go up or down at any time.
Historically, fixed rates have been lower than floating rates in New Zealand, making fixing the more popular choice for owner-occupiers. The one-year fixed rate is the most popular term, accounting for the majority of new home loans. However, the right choice depends on your personal circumstances — how much certainty you need in your budget, whether you plan to sell or refinance, and your view on where interest rates are heading.
Most New Zealand banks offer split mortgages, where you fix part of your loan and leave part floating. This hybrid approach gives you certainty on the fixed portion while allowing extra repayments and flexibility on the floating portion. For example, you might fix 60% of your mortgage for two years and leave 40% floating — benefiting from rate reductions on the floating portion while protecting most of your loan from rate rises.
How the Fix vs Float Calculation Works
This calculator compares the total interest cost of two strategies over the full life of your loan. The fixed scenario assumes you fix for your chosen term at the fixed rate, then switch to the "after fixed" rate for the remaining term. The floating scenario assumes you stay on the floating rate for the same initial period, then move to the same "after fixed" rate for the remaining term.
The monthly repayment for each period is calculated using the standard amortisation formula: payment = P × r(1+r)^n / ((1+r)^n − 1), where P is the principal, r is the monthly interest rate, and n is the number of remaining monthly payments. At the end of the fixed or floating period, the outstanding principal is recalculated and the repayment for the remaining term is computed using the "after fixed" rate.
The total interest figures show you how much each strategy costs in interest over the entire loan term. The difference can be significant — even a 1% difference in rate on a $500,000 loan over 25 years translates to tens of thousands of dollars in additional interest. Use this calculator to run different scenarios with rates your bank has offered you to find the lowest-cost path.
When to Choose Fixed or Floating in NZ
Choose a fixed rate when you want budget certainty and believe rates may rise, or when you cannot afford for your repayments to increase. Fixed rates are particularly valuable for first-home buyers who are stretching their budget and cannot absorb higher repayments. They are also useful if you are on a single income, planning a family, or expecting a period of reduced income.
Choose a floating rate (or a shorter fix) when you expect interest rates to fall, when you plan to sell your property before a fixed term expires, or when you want the flexibility to make large lump-sum repayments without break fees. If the Reserve Bank is in an OCR-cutting cycle, staying floating or fixing short-term means you will benefit from rate reductions as they flow through. Breaking a fixed mortgage early can result in substantial break fees — sometimes tens of thousands of dollars — so it is important to consider your plans before committing to a longer fixed term.
Frequently Asked Questions
Should I fix or float my mortgage in NZ?
The right choice depends on your personal circumstances and outlook on interest rates. Fixing gives certainty — you know exactly what your repayments will be for the fixed term, which makes budgeting easier. Floating gives flexibility — you can make extra repayments or pay off the loan early without penalty. In a declining rate environment, floating can save money; in a rising rate environment, fixing locks in a lower rate. Most NZ homeowners split their mortgage between fixed and floating to get both certainty and flexibility.
What is the current NZ fixed mortgage rate?
As of early 2025, one-year fixed home loan rates from major NZ banks are around 6.0-6.5% per annum, and two-year fixed rates are around 5.8-6.2%. Floating rates are typically higher — around 6.8-7.5% p.a. Rates change frequently based on the Reserve Bank of New Zealand's Official Cash Rate (OCR) decisions. Always check your bank's current rates before making a decision.
What happens at the end of a fixed term in NZ?
When your fixed term expires, your mortgage automatically reverts to the bank's floating (variable) rate unless you proactively re-fix it. You will usually receive a letter from your bank a few weeks before expiry offering new fixed-rate options. This is your opportunity to shop around and potentially refinance to a different lender for a better deal. Most advisers recommend starting this process at least 8 weeks before your fixed term expires.
Can I break a fixed-rate mortgage in NZ?
Yes, but you will typically pay a break fee (also called early repayment fee or mortgage break cost). The break fee compensates the bank for the interest it will miss out on. It can be very large — sometimes tens of thousands of dollars — if you break a fixed mortgage when rates have fallen significantly since you fixed. You can request a break fee estimate from your bank before making a decision.
What is the difference between fixing for 1 year vs 2 years in NZ?
Fixing for one year gives you a shorter commitment — you can review your options and re-fix (or switch to floating) sooner. Two-year fixed rates are sometimes lower than one-year rates when the market expects rates to fall, but not always. A shorter fix is generally better when rates are expected to fall, so you can re-fix at the lower rate sooner. A longer fix is better when rates are expected to rise, locking in today's lower rate for longer.