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Refinance Calculator — Compare Rates & See Your Savings

Current Loan

$
%
Refinance To
%
$
Monthly Saving
$307
per month
Current Monthly
$2,715
7.2% rate
New Monthly
$2,408
5.9% rate
Remaining Balance
$377,320
Net Saving
$90,126
Break-Even
7 months

Interest Comparison (remaining term)

Current loan remaining interest$437,225.74
New loan total interest$345,099.77
Interest saved$92,125.98
Less: Switching costs−$2,000.00
Net saving$90,125.98
Current InterestNew Interest
$437,226$345,100
Verdict: Refinancing could save you $307/month and $90,126 over the life of the loan (after switching costs). You'll break even on switching costs in 7 months.
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See How Much You Could Save by Refinancing

Our free refinance calculator compares your current loan against a new offer, showing exactly how much you'll save each month, over the life of the loan, and how quickly you'll recoup switching costs. Enter your current loan details and a new rate to see if refinancing makes financial sense.

When Should You Refinance?

Refinancing makes sense when the interest savings outweigh the switching costs. Consider refinancing if:

  • Your current rate is 0.5% or more above the best available rates
  • Your loan balance is large enough for the rate difference to be meaningful
  • You plan to keep the loan longer than the break-even period
  • Your property value has increased, improving your loan-to-value ratio (LVR)
  • Your credit score has improved since you took the original loan

Typical Switching Costs

FeeTypical CostNotes
Discharge fee (old lender)$150 – $400Charged by your current lender to release the mortgage
Application fee (new lender)$0 – $600Many lenders waive this or offer cashback
Valuation fee$0 – $300Often waived for online applications
Mortgage registration$100 – $200Government fee to register the new mortgage
Break costs (fixed rate only)VariesCan be substantial — check with your lender before switching

Refinancing Strategies to Maximise Savings

  • Keep the same remaining term — Don't restart at 30 years; match your remaining term to avoid paying more interest overall
  • Negotiate first — Call your current lender and ask for a rate match before paying switching costs
  • Look beyond the rate — Consider offset accounts, redraw facilities, fee structure, and loan flexibility
  • Use cashback offers wisely — Some lenders offer $2,000–$4,000 cashback which can offset or eliminate switching costs
  • Check your LVR — If your property has risen in value, you may qualify for better rates with a lower LVR tier

Fixed vs Variable Rate Refinancing

AspectFixed RateVariable Rate
Rate certaintyLocked for 1–5 yearsChanges with market
Extra repaymentsUsually capped or penalisedUnlimited in most cases
Break costsCan be significantNone
Offset accountRarely availableUsually available
Best whenRates are expected to riseRates are expected to fall

Frequently Asked Questions

How does refinancing save money?
Refinancing replaces your existing loan with a new one at a lower interest rate. Even a small rate reduction (e.g., 0.5%) on a large loan can save thousands of dollars per year in interest. The savings compound over the remaining loan term, often resulting in tens of thousands saved in total.
What are switching costs?
Switching costs include discharge fees from your current lender (typically $150–$400), application fees for the new loan ($0–$600), government mortgage registration fees ($100–$200), and potentially lenders mortgage insurance (LMI) if your equity is below 20%. Some lenders offer cashback or fee waivers to offset these costs.
What is the break-even point?
The break-even point is how long it takes for your monthly savings to cover the switching costs. For example, if you save $200/month and switching costs are $1,000, you break even after 5 months. Refinancing generally makes sense if you plan to keep the loan longer than the break-even period.
Should I extend my loan term when refinancing?
Extending your loan term lowers monthly payments but increases total interest paid. For example, refinancing a 25-year remaining loan to a new 30-year term reduces your monthly payment significantly, but you pay interest for 5 extra years. If possible, match or reduce your remaining term to maximise savings.
How much rate difference makes refinancing worthwhile?
As a general rule, refinancing becomes worthwhile when the new rate is at least 0.5% lower than your current rate. However, the actual answer depends on your loan balance, remaining term, and switching costs. Use this calculator to check your specific situation — sometimes even a 0.25% difference can save thousands on a large loan.
Can I negotiate with my current lender instead?
Yes, and you should try this first. Contact your lender, mention you're considering refinancing, and ask for a rate reduction. Many lenders will reduce your rate to retain you — often matching or coming close to competitor offers without any switching costs. This is called a "retention rate" or "loyalty discount."
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