Mortgage break fee calculator
An estimate of the fee for repaying a fixed rate early, using the safe-harbour formula in the credit regulations. Banks use wholesale rates, so treat it as a guide.
The short answer
Breaking a $490,000 loan fixed at 6% with 12 months left, when the bank’s 1-year rate is 5.06%, gives a safe-harbour estimate of $4,455.63. If rates have risen since you fixed, the estimate is usually zero.
| Bank’s rate now for the nearest term (i) (average advertised 1 year rate, 10 November 2026) | 5.06% |
| Your repayment (p) | $2,974.33 |
| monthly repayments left in the fixed term (n) | 12 |
| Interest due in the rest of the fixed term (IC) | $29,224.05 |
| Repayments due in the rest of the fixed term (TP) | $35,691.96 |
| Balance at the end of the fixed term (EB) | $483,532.09 |
| Value today of what you would have paid (VFP) | $494,455.63 |
| Balance now (u) | $490,000.00 |
| Estimate | $4,455.63 |
An estimate only. Banks work out their real fee from wholesale swap rates and their own loan terms, which we cannot see. Ask your bank for a quote before you break a fixed rate.
How the estimate works
The credit regulations set a formula that is presumed to give a reasonable estimate of a lender’s loss when you repay early. It values the repayments you would have made for the rest of the fixed term, plus the balance you would have owed at its end, at the bank’s current rate for the nearest term, and compares that with what you owe now.
The formula (CCCFR reg 11)
VFP = p × ((1 − v^n) / (i / f)) × (1 + i)^(d / 365) + v^n × (1 + i)^(d / 365) × EB, where v = 1 / (1 + i / f) and EB = u + IC − TP
LRE = VFP − u, and zero if that is negative
The regulations’ own examples, reproduced
Our engine reproduces the worked examples in the Credit Contracts and Consumer Finance Regulations 2004 to the cent: a $5,000 loan at 12% over 24 months, repaid early after 6 months and 5 days.
| Example | Lender’s rate now | Result |
|---|---|---|
| Fixed for the whole term (reg 9) | 10% | $58.57 |
| Fixed for the whole term (reg 9), rates higher | 15% | $0.00 |
| Fixed for year one only (reg 11) | 10% | $31.79 |
Credit Contracts and Consumer Finance Regulations 2004, regs 9 and 11 (1 July 2026)
What banks actually charge
Banks may charge only a reasonable estimate of their loss. BNZ says its charge depends on how far wholesale rates have fallen since your fixed term began, the amount repaid and the time left. Kiwibank says the cost is different for each person and changes day to day. ANZ calls it an early repayment recovery.
Because banks use wholesale swap rates and their own terms, a real fee can differ from our estimate. If wholesale rates have risen since you fixed, there is usually no fee.
Who regulates break fees
From 1 July 2026 the Financial Markets Authority (FMA) took over from the Commerce Commission as the regulator of the Credit Contracts and Consumer Finance Act. Your loan contract must say how the bank estimates its loss and whether it uses the regulations’ formula.
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