Is Your Mortgage About to Reset? Here’s What You Need to Know
Vesta Finance & Advisory is a mortgage and finance brokerage committed to helping ambitious professionals and business owners achieve long-term financial success. Their regular editions of The Vesta View e-newsletter are the perfect snapshot of what’s happening in the market, and why it could be relevant to you; empowering you with advice and insight. Here’s the latest bite-sized overview, written by Jess Shaw and Jessie Parker at Vesta:
Market Update:
The Reserve Bank has cut the Official Cash Rate (OCR) from 3.25% to 3% this month. While this move was widely expected, what’s got everybody talking is the RBNZ’s updated forecast signalling the OCR could fall as low as 2.5% in the next 6 months.
Wholesale rates have dropped post announcement by 0.15-0.20% which has meant the banks have dropped their fixed and floating rates in the past week.
Why it matters:
Mortgage rates - we are seeing some of the lowest short-term fixed rates in years, and banks are competing strongly in the 1–2 year space.
Business lending - banks are open for business and credit appetite is improving.
Cashflow benefits - lower rates can create breathing room for households and businesses - but it’s also an opportunity to keep repayments the same and get ahead faster.
The Great Refix:
We are currently in a once in a decade mortgage rate reset with nearly $200b of NZ home loans on floating or short-term fixed rates. If your mortgage is due for a reset soon, this isn’t just another OCR cut it’s your money, your home and your financial future.
Now is the perfect time to optimise your lending so you can take advantage of the fixed rate options that will be available over the short-medium term.
Before refixing online ask yourself these questions.
Your Life Plans
Do you expect any changes to your income over the next two years? (Changing careers, starting a business, taking time out?)
Are you planning family changes in the next five years? (Starting a family, having another child?)
Do you plan to sell a property or buy a new one in the next couple of years?
Property & Investment
Are you looking to use your equity for other opportunities?
Buying a rental property?
Purchasing a commercial property for your business?
Business Growth
Do you see your business growing in the next two years?
Will you require funding to support that growth?
Are you considering buying a business?
Savings & Smart Structures
Do you have savings, or plan to save in the next two years?
Have you heard of offsetting? You could use savings to reduce your interest costs, while still keeping access to the funds if needed.
Would splitting your lending across different terms help spread risk and give flexibility?
Bank Offers & Retention
Are you still with the right bank for your needs?
Could your bank offer you a retention deal to stay, or could another bank offer a cashback to switch?
What fees, cashbacks, or incentives apply if you restructure or move banks?
Refixing is more than just choosing a rate; it’s a chance to reset your lending so it matches your bigger goals. The right structure today can save you money, give you flexibility, and set you up for what’s next.
Lender Low Down:
The banking sector is heating up, with lenders putting some sharp rates and creative structures on the table. It’s a competitive time to review your options and the right move could save you and your business money or free up cashflow.
If you are curious about where you stand with your bank or lending reach out and we can help you review your options and see how you can take advantage of the current environment.
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