If your fixed-term home loan is coming up for renewal, you’re not alone — thousands of Kiwis are in the same boat. Many locked in ultra-low rates during the Covid years and are now facing a different market. Understanding what happens when a fixed term ends — and what your options are — can save you stress and money. as a mortgage broker based in Tauranga, I’ve seen how a little forward planning can make a big difference once that rate roll-off notice lands in your inbox.

Why fixed-rate loans became so popular

Fixed loans surged when banks offered sub-2% interest rates during 2020–2021. They gave borrowers predictable repayments and peace of mind in an uncertain economy. Fast-forward to 2025, and many of those terms are expiring into an environment of higher rates and tighter lending rules. Knowing what happens next — and what you can change — helps you stay in control instead of rolling to a high “revert” rate by default.

What happens when your fixed term ends

About six weeks before expiry, your lender (and ideally your broker) will contact you with options. You’ll generally be able to:

• Re-fix: choose a new fixed period, usually 1–5 years, locking in today’s rate.
• Switch to variable: move to a floating rate that rises or falls with market changes.
• Refinance: move to another lender if they’re offering sharper pricing or better features.

If you do nothing, most banks automatically shift you to their standard variable rate, which can be significantly higher than negotiated rates — essentially a default setting that favours the lender, not you.

How to decide whether to re-fix or go variable

There’s no one-size-fits-all answer. A fixed loan offers certainty, while a variable loan gives flexibility. Ask yourself:

• Do you need steady repayments for budgeting?
• Are you planning renovations or a sale soon?
• Would a blended or split-loan structure (part fixed, part variable) give you breathing room?

In 2025, many Tauranga clients are choosing shorter 1-year fixed terms to stay flexible while rates stabilise.

Can you extend your current fixed term?

Not directly. When a fixed term ends, you’re entering a new contract — with a new interest rate based on current market conditions. Your broker can model several refix scenarios so you can see how repayments change before committing.

What if rates move while you’re still fixed?

That’s both the advantage and drawback of fixed lending.

• If rates rise, you’re protected for the remainder of your term.
• If rates fall, you won’t benefit until your fixed period finishes.

Some banks let you rate-lock before settlement — holding the agreed rate for a small fee. This can help if you think rates will jump before your new term begins.

Can you change or break a fixed loan early?

Yes, but tread carefully. Breaking a fixed contract can trigger break fees or re-pricing costs, especially if market rates have dropped since you fixed. The penalty can range from a few hundred to several thousand dollars depending on loan size and remaining term. Always check with your broker first — sometimes restructuring through a top-up, partial break, or refinance can soften the cost if handled correctly.

Practical steps before your fixed term ends

1. Review your loan 8–10 weeks out.
2. Ask your broker to compare refix, refinance, and split options across multiple lenders.
3. Update your budget — new rates mean new repayments.
4. Avoid auto-rollover. Even one extra month on a high revert rate adds unnecessary cost.

Local example — Tauranga homeowner

A couple in Pyes Pa had a two-year fixed loan at 5.19%. When their term ended, they were automatically quoted 7.25% variable. After reviewing options, we re-fixed half for 12 months and left half floating. That flexibility allowed them to pay off lump sums faster and keep options open if rates ease later in 2025.

Key takeaway

When your fixed home loan ends, doing nothing is the most expensive choice. Talk to a mortgage broker before your rate expires — ideally two months in advance — so you can compare lenders, structure your repayments smartly, and avoid paying the bank’s revert rate. Book a quick chat today to find out what your next move should look like.