Mortgage Break Fee Calculator NZ 2026

Calculating a mortgage or home loan break fee can be quite complicated, however with our easy to use tool we do all of the hard work for you. When it comes to home loans or mortgage break fees four key factors influence the end fee amount. These factors are a) what the remaining balance of the loan is, b) what the change in the wholesale interest rate has been since the rate was fixed, c) how much of the fixed-rate term is still to run, in years, and lastly if the bank or lender charges a set fee like an administration fee d). An example of this is if you have a loan with $500,000 remaining on the balance (a) that you fixed at 5.00% that is due to be broken at the new wholesale rate of 4.00% (b) with 3 years remaining on the fixed-rate term (c) plus the administration fee (d). In this case it would be $500,000 * (5.00% - 4.00%) * 3 which ends up as $500,000 * 1.00% * 3 = $15,000. If the rate since the loan was fixed has increased there will likely be no rate related fee however the provider may charge a one-off administration fee. The wholesale rate that the lending establishment will use will be the wholesale hedge rate, which will most likely be from Bloomberg. This is the rate that they determine they can get fixed-rate funds from the wholesale money market on the prepayment day. This is usually made up of a fixed start, and a day rate. As a rule of thumb, this rate will be ~50 basis points (or one-half percent) lower than the best-fixed rate offered by the bank.

Important: a break fee is only ever charged over the remaining fixed-rate term, not the remaining life of the mortgage. If you have a 30-year mortgage but fixed the rate for 3 years, the bank only recovers its loss for the balance of that 3-year fixed period. So enter the length of your fixed-rate term and the date that fixed-rate term started, not your original 30-year term and settlement date. Entering the full mortgage term instead will overstate the fee many times over.

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