The great mortgage reset of 2025: Navigating refixing opportunities

BY JULIUS CAPILITAN, C21 FINANCIAL

As we move further into 2025, many New Zealand homeowners are facing what’s being called the “Great Mortgage Reset” – a period where a significant number of fixed-term mortgages are coming up for refixing. With over $200 billion worth of mortgages due for refixing in the first half of this year, borrowers need to reassess their options carefully.

What Is The Great Mortgage Reset?

Over the past few years, many homeowners opted for short-term fixed mortgage rates to secure lower interest rates at the time.

Now, as these fixed terms expire, a large number of borrowers must refix their loans at today’s market rates. This presents both risks and opportunities depending on how interest rates move in the coming months.

Julius says: “With so many homeowners needing to refix, we’re in a unique moment where borrowers can make smarter financial moves. The right decision now could mean saving thousands over the next few years.”

Current Interest Rate Landscape

The Reserve Bank of New Zealand (RBNZ) has cut the Official Cash Rate (OCR) from 4.25% to 3.75%, with further reductions expected in April and May. This has already led to lower mortgage rates, with some lenders now offering rates as low as 4.99% for two-year fixed terms.

However, while rates are dropping, the biggest cuts may already be behind us. The market has already priced in most future OCR reductions, meaning long-term rates might not fall much further.

Julius says: “We’ve seen floating, flexible, and test rates drop, but we’re still waiting on better longterm rates. The best we’ve seen so far is 4.99% for two years, but we’re keeping an eye on whether lenders release more competitive options.”

Strategies for Homeowners Facing Refixing

If your mortgage is coming up for renewal, now is the time to take action. Here are three key strategies to consider:

1. Assess Fixed vs. Floating Rates – While fixed rates offer repayment certainty, floating rates could provide flexibility if further rate cuts are expected.

2. Consider Shorter-Term Fixes – A six-month or one-year fix could allow borrowers to take advantage of current rates while keeping the option open for future cuts.

3. Speak to a Mortgage Adviser – Every borrower’s situation is different. A mortgage expert can help you weigh the options and lock in the best possible rate.

Julius says: “Each client’s situation is unique, and that’s why we take a tailored approach. There’s no ‘onesize-fits-all’ mortgage solution, and now more than ever, it’s important to get professional guidance.”

Opportunities for New Buyers

While house prices remain down compared to 2021, falling mortgage rates mean the cost of borrowing has become more affordable. With interest rates expected to remain lower through 2025, it could be an ideal time for buyers to enter the market.

For those considering a first home purchase or investment, the key questions to ask are:

• Can I afford repayments if rates increase again in future?

• Am I better off locking in a fixed rate or keeping some flexibility?

• How much deposit do I need to secure the best possible mortgage deal?

Final Thoughts: Make the Most of 2025’s Opportunities

With so many mortgages coming up for renewal, the decisions homeowners make in the next few months will be crucial.

The right move now can lead to lower repayments and long-term financial stability.

At Century 21 Financial, we do the hard work for you, ensuring you lock in the best mortgage rate based on your personal circumstances.

Julius says: “Don’t leave it to the last minute. If your fixed term is ending soon, let’s have a chat and make sure you’re getting the best deal possible.”

Need help navigating your mortgage refix? Contact Century 21 Financial today and let’s get started.