Another OCR drop? Three smart ways to restructure your mortgage now.
Why this is important:
If your fixed rate is rolling off in the next 6 months, this is the playbook we walk every client through. No theory, just the three structures we use most often, and the trade-offs each one carries.
Every time the OCR moves, our inbox fills up with the same question: 'should I refix?'. The honest answer is “maybe” — but refixing is just one of three things you can do, and the right one depends on where you're at in your mortgage lifecycle.
An OCR drop doesn't automatically lower your rate. It changes what lenders can offer when they next reprice. If you're locked into a fixed term, you'll only see the benefit when that term rolls off — unless you break early and pay a break fee.
“The biggest mistake we see is treating an OCR drop as a rate question. It's a structure question”.
Most of our refinance conversations right now are about timing: how long is left on your current fix, what's the break-fee math, and which of the three options below makes most sense once you're free to move.
Option 1: shorter term, same repayment
The simplest play. When rates drop, you refix at a lower rate but keep your repayment at the old level. The difference goes straight to principal. On a $600k loan, this typically shaves 2–4 years off your term — with no change to your monthly cashflow.
Option 2: revolving credit overlay
Where Option 1 forces a fixed extra repayment, an RC overlay gives you a flexible facility — usually 10–30% of your loan — that you can draw down and repay against.
This options is best for clients with variable income or who want to keep an emergency buffer working harder than a savings account.
Option 3: split-fix to ride the curve
If you can't decide between short- and long-term rates, you don't have to. We split most refinance loans across two or three fixed terms — a 1-year, 2-year, and 3-year for example — so part of your loan reprices every 12 months. You get the benefit of falling rates without betting the whole loan on a single term.
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