Should I fix or float my mortgage?

Fixing locks in a rate for certainty and is usually a little lower, while floating costs more but lets you make extra repayments or repay early without break fees. Many borrowers split their loan between fixed and floating to get some of both.

Why is the floating rate higher?

Floating rates are typically higher than fixed because you are paying for flexibility: you can repay lump sums, change repayments or refinance at any time without a break fee. Fixed rates trade that flexibility for a lower, locked-in rate.

What is the cost of floating?

It is the extra interest from the higher rate over the period. This calculator shows that extra cost so you can decide whether the flexibility is worth it, or whether to fix or split the loan.

Fixed vs Floating Mortgage Calculator

This New Zealand calculator compares a fixed mortgage rate against a floating rate, showing the repayment difference and the extra interest the higher floating rate costs over a period. Floating buys you flexibility, extra repayments and early repayment without break fees, while fixing locks in a usually lower rate for certainty. You enter your loan, the two rates and a term, and the tool shows the cost of the flexibility.

Loan amount

Fixed rate

Floating rate

Term (years)

extra per month on the floating rate

Fixed repayment$0

Floating repayment$0

Extra interest per year$0

Compares table repayments at each rate over the term. The flexibility of floating (extra repayments, no break fees) has real value not captured here. Many borrowers split the loan between fixed and floating. Estimate only, not a loan offer.

How it works

The calculator works out the standard table repayment for your loan at both the fixed and floating rates over the term, using the amortisation formula. The difference is what floating costs you each month and year in extra interest. That is the price of the flexibility floating gives, which you can weigh against the certainty and lower cost of fixing, or split the loan to get some of each.

Worked example

On a $600,000 loan over 30 years, a 5.79% fixed repayment is about $3,516 a month, while a 6.69% floating repayment is about $3,866, around $350 a month more, or roughly $4,200 a year, for the flexibility floating provides.

Related calculators

Mortgage Repayment Calculator: repayments.
Fixed-Rate Rollover Calculator: when a fix ends.
Mortgage Break Fee Calculator: break fees.
Revolving Credit Calculator: flexible facilities.

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