Six‑month repricing surge to test adviser client strategies
New Zealand’s “year of the refix” may be fading, but BNZ says there is still meaningful cash‑flow relief to come through 2026 – even as the mortgage rate outlook pivots higher.
BNZ chief economist Mike Jones (pictured) has taken “a quick look into how much juice might be left in the refixing trend”, calling it “an important plank of the economic recovery.”
For mortgage advisers, that question is no longer theoretical: banks are nudging fixed rates higher and clients are asking how long to fix and how to balance certainty, flexibility, and cost.
Mortgage rate outlook pivots upwards
Jones says the Reserve Bank’s November meeting “heralded the end of the interest rate downtrend”, with stronger activity data and the Q4 CPI leaving “a little less breathing room on inflation.”
In response, BNZ has “pulled forward our forecast start to the Reserve Bank's tightening cycle. We now see the first hike coming in September,” he said.
Mortgage rates have already “nudged up a little further so far this year, following the 20-30bps bump in longer term rates in December.” With wholesale rates back near their December highs, Jones says “the bias remains upward” for mortgage pricing from here.
With upside inflation surprises in late 2025 and price pressures building, advisers are increasingly focused on how much rate support is left and how soon the next OCR hike might land, even as higher unemployment and spare capacity suggest the RBNZ still has some breathing room.
How much refixing is left?
BNZ dubbed 2025 “the ‘year of the refix’ with 81% of fixed-rate mortgage borrowings repricing – a 13 year high.” Over the next 12 months the pace slows but stays elevated, with 68% of fixed‑rate loans – or 72% of all borrowings including floating – due to reprice.
“The coming six months” are the most intense, with around $132 billion – 34% of total mortgage debt – rolling, versus a long‑run average of 27%. Crucially for advisers, “most borrowers soon to experience a mortgage rate reset will face a menu of rates more favourable than previously,” with the current mortgage curve “around the lowest in recent history.”
BNZ’s example: a one‑year $300,000 loan fixed a year ago at 5.74% could currently be refixed at about 4.50%, delivering “an interest saving of a little over $300/month.”
Average mortgage rate still falling – but nearly done
At an economy‑wide level, the RBNZ’s average mortgage yield sat at 5.17% in November, down from a 6.39% peak in October 2024. Based on BNZ’s projections, the average rate should keep easing until around the middle of the year, bottoming “about 4.85%.”
“In short, the process of mortgage borrowers refixing onto lower rates is roughly 80% complete. There’s another 25bps or so of easing coming down the refixing pipeline, spread over the first half,” Jones said.
That means cash‑flow relief from refixing will “remain a support for the economic recovery, albeit a dissipating one” – and, even with earlier forecast OCR hikes, monetary policy “looks set to remain stimulatory for all of 2026.”
For Kiwi mortgage advisers, the priority now is clients rolling in the next six months: quantifying savings, deciding whether to pay down principal faster or rebuild buffers, and stress‑testing budgets against the possibility that the next OCR move is up rather than down.
Read the full BNZ analysis here.
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