Mortgage break fee calculator
How much does it cost to break a fixed mortgage in New Zealand?
Breaking a fixed loan early triggers a break cost, sometimes called economic cost: roughly the interest margin the bank loses, applied to your balance for the time left on the fixed term. It is zero when rates have risen since you fixed. Every bank uses its own formula, so treat any outside estimate as indicative only.
The rate on the loan you are thinking of breaking.
Roughly what the bank could lend that money at today for the time you have left.
Indicative break cost
$7,765
- Rate difference
- 1.20 pts
- Time remaining
- 18 months
- Balance
- $450,000
Treat this as an order of magnitude only.Every New Zealand bank uses its own formula and its own internal wholesale rates, which are not public, so no third party can reproduce your bank’s figure. Ask your bank for a written break cost — they will give you one, and it is usually valid for a short window.
This is a general estimate, not financial advice.
Rates change weekly. interest.co.nz publishes what every New Zealand bank is advertising today, and Sorted is the government’s own calculator if you would like to check these numbers against a second source.
Common questions
- Why can't a calculator tell me my exact break fee?
- Because the formula uses your bank's internal wholesale funding rates, which are not published, and each bank's method differs. Any outside estimate can only show the shape and order of magnitude. Your bank will give you a written break cost on request, usually valid for a few days.
- When is the break cost zero?
- Broadly, when wholesale rates have risen since you fixed. The bank can then relend that money at more than you are paying, so there is no economic loss to recover. You may still face a small administration fee. It is worth asking even when you expect a large number.
- Can I avoid a break fee by waiting?
- The cost falls as the fixed term runs down, because there is less remaining time for the bank to recover. At the end of the fixed term there is no break cost at all. If your term ends within a few months, waiting is often cheaper than breaking.
- Is a break fee tax deductible?
- For an owner-occupied home, no. For a rental property, break costs may be deductible as a cost of borrowing, subject to the interest limitation rules that apply to residential rental property. Inland Revenue sets the treatment and it has changed more than once — check IRD guidance or ask an accountant.