The questions and original answers

For a NZ$60,000 renovation loan on top of your existing home mortgage, I’d prioritise repayment flexibility over simply finding the lowest advertised interest rate.

The key is to choose a lender and loan structure that lets you pay the loan off faster when you have spare cash, reduce repayments if your circumstances change, and avoid unnecessary break fees when you want to make adjustments.

In New Zealand, you may not need to move your entire mortgage to a new bank. Your existing lender could offer the simplest solution by adding a separate renovation loan to your current home loan.

The three loan features that matter most

• Extra repayments: Can you make lump-sum payments or increase regular repayments without a penalty?
• Repayment changes: Can you adjust your payment amount or frequency, and how often?
• Access to spare cash: Would a revolving-credit facility or offset mortgage suit you, or would a standard loan be simpler and cheaper?

A floating-rate or revolving-credit portion often offers more flexibility than a fixed-rate loan. Fixed rates can still be useful for budgeting, but extra repayments may be limited or subject to conditions.

My recommended lenders

These are the lenders I would shortlist based on their published loan features, not a claim that one will offer you the cheapest rate or approve your application.

1. ASB

Best for repayment flexibility

ASB's floating-rate home loan lets you make extra repayments without early repayment adjustment costs. Its Orbit revolving-credit loan also lets you repay and redraw money within your approved limit. You can manage repayment settings through ASB Home Central. Floating mortgage & home loans - View rates onlineRevolving mortgage - Giving you flexibilityASB Home Central

Why I'd shortlist it: Good if you want to pay extra whenever you can and adjust your repayments without being locked into a fixed-rate structure.

Watch out: Orbit requires disciplined budgeting, and floating interest rates can rise.

ASB floating home loan · ASB Orbit

2. Kiwibank

Best for irregular income or renovation spending

Kiwibank's revolving-credit home loan lets you draw funds as needed up to your credit limit, with no fixed repayment terms. Its variable-rate loan allows extra repayments whenever you like, while its offset loan can reduce interest using money in linked accounts. Revolving home loan | Home loansVariable rate home loan | Home loansOffset home loan | Home loans

Why I'd shortlist it: Especially useful if renovation bills arrive in stages, you receive bonuses, or you want to direct spare cash into the loan.

Watch out: Revolving credit requires discipline; a flexible credit limit isn't the same as a plan to repay the debt.

Kiwibank revolving-credit loan · Kiwibank variable-rate loan

3. BNZ

BNZ allows home-loan top-ups on either fixed or floating rates. Its floating-rate option allows additional lump-sum repayments and changes to repayment amounts. It also permits repayment increases on most fixed and floating loans, although fixed-rate early repayment charges can apply. Home loan top-upsManage your home loan

Why I'd shortlist it: A strong option if you want a distinct $60,000 renovation loan alongside your existing mortgage, with the flexibility to make extra payments.

Watch out: Ask exactly how often repayments can be changed and whether any administrative conditions apply.

BNZ top-ups · BNZ loan management

4. Westpac

Westpac's Choices Floating with Offset loan allows lump-sum payments, higher repayments, and reductions in regular repayments down to the required minimum. It also supports redraw within the approved limit and can be split with a fixed-rate loan. Choices Offset Floating home loanFinance your project

Why I'd shortlist it: Particularly attractive if you want the option to pay extra now but lower your repayments later, or if you have savings that could offset mortgage interest.

Watch out: Check the floating interest rate, account costs and whether offsetting would save you enough to justify the structure.

Westpac Choices Floating with Offset

5. ANZ

ANZ offers floating and flexible home-loan options. Its Flexible Home Loan allows you to pay money in and redraw it within your limit, without set regular repayments, although a monthly fee and generally higher interest rate apply. Its standard floating loan also allows extra repayments. Flexible MortgagePay off your home loan faster

Why I'd shortlist it: Worth considering if you're already an ANZ customer or want a highly flexible portion for your renovation.

Watch out: ANZ's advertised Reno Loan is capped at $50,000, so it won't cover your full $60,000 requirement on its own. Ask about a standard top-up or a combination of loan types. Top up your ANZ Home Loan

ANZ top-ups · ANZ Flexible Home Loan

How I'd structure your $60,000 renovation borrowing

Rather than automatically putting the whole amount on a floating rate, I'd ask your current bank to price these two options.

Option A — Separate floating-rate loan

My starting recommendation

Borrow $60,000 in a separate floating-rate mortgage account with regular principal-and-interest repayments.

• Make additional payments whenever you have spare money.
• Adjust your regular repayments subject to the lender's rules.
• Keep the renovation debt separate from your existing mortgage, so you can track and repay it faster.

Option B — Revolving credit

Use a revolving-credit facility if you need to draw renovation funds in stages or want to pay money in and redraw it later.

• Interest is generally charged on the amount actually borrowed.
• Income and spare cash can reduce the outstanding balance and interest.
• You need a clear repayment plan, because the facility may not have a fixed repayment schedule.

If your income is predictable and you mainly want to make occasional extra payments, Option A is likely the simpler choice. If your income varies or your renovation costs are uncertain, Option B could be more useful. The lenders' published features support these distinctions. Floating mortgage & home loans - View rates onlineRevolving mortgage - Giving you flexibilityRevolving home loan | Home loans

What to ask each lender

Before committing, get written answers to these questions:

1. Can we increase and decrease our regular repayments at any time, and what is the minimum repayment?
2. Can we make unlimited lump-sum repayments without early repayment charges?
3. Is there a fee to establish the top-up, change the loan structure, or maintain the account?
4. Can we borrow the $60,000 as a separate loan without refinancing our existing mortgage?
5. Can we choose a shorter repayment term for the renovation portion?

Also check your available home equity, affordability, and whether breaking or changing any existing fixed-rate lending would incur a charge.

My final shortlist

I'd approach the banks in this order:

1. Your current lender first — compare the cost and convenience of a top-up against refinancing elsewhere.
2. ASB and Kiwibank — particularly if repayment flexibility and access to funds are your top priorities.
3. BNZ and Westpac — strong alternatives for a separate renovation loan with flexible repayment features.
4. ANZ — worth including if you're already a customer or want to explore its flexible loan structure.

This is a shortlist based on flexibility, not a ranking of the lowest interest rates. The best deal will depend on your existing mortgage, equity, and the actual rate and fees offered to you.

One question that would help me narrow this down

Which bank is your existing mortgage with?

That would let me focus on the most relevant top-up options first, and whether switching banks is likely to be worth investigating.