Break Fee vs Stay Calculator NZ
This calculator helps you work out whether breaking a fixed-rate mortgage part-way through its term to refix at a lower rate is actually worth it once the break fee is taken into account. When rates fall, refixing lower can look tempting, but the fee your bank charges for breaking early can easily wipe out the saving, so it pays to run the numbers rather than guess. You enter your loan amount, your current fixed rate, the new rate you would refix at, how many months remain on your current fixed term, and the estimated break fee your bank has quoted, or an estimate if you are still waiting on the exact figure. The calculator works out the interest you would save on your loan balance over the remaining term at the new rate, then compares that saving against the break fee to give a clear verdict of whether breaking is likely worth it, staying put is likely better, or it is about even, alongside the interest saved, the break fee and the net benefit in dollars. Because the saving is based on your current balance rather than the gradually reducing balance as you repay principal, the real saving will be a little lower than shown, and break fees change daily, so confirm the exact figure with your bank before deciding. This is an indicative estimate only, not financial advice.
The interest saving is estimated on your current balance over the remaining fixed term; as you repay principal the real saving is a little lower. Get the exact break fee from your bank, as it changes daily with wholesale rates. Estimate only, not financial advice.
How it works
The calculator estimates the interest you would save by moving from your current rate to the new rate on your loan balance over the remaining fixed term. It compares that saving against the break fee you enter. If the saving is larger than the fee, breaking and refixing puts you ahead; if the fee is larger, you are better staying put until your fixed term ends.
Worked example
On a $500,000 loan, dropping from 7% to 6% saves about 1% a year, or $5,000, over 18 months that is roughly $7,500 of interest. Against a $4,000 break fee, breaking leaves you about $3,500 ahead, so it is worth it here.
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