PHOTO: LUZ ZUNIGA/STUFF Banking expert Claire Matthews, of Massey University, said it usually needed to be a substantial saving in interest rate to make breaking worthwhile, or the loan would have to be near the end of a fixed term.

If your mortgage is on a fixed term, you might be studiously avoiding looking at the interest rates currently on offer.

What looked like a good deal a year ago, when two-year rates were just over 5 per cent, might not look such a bargain when banks are offering less than 4 per cent.

Most banks will let you break a fixed term to move to a cheaper offer, but in almost all cases you’ll be charged a break fee.

How much that costs depends on how long you have left of the fixed term and what the bank could lend the money to a new borrower for. Generally, you end up paying roughly what you save by switching in a break fee. But sometimes it can pay off.