Refinance Savings Calculator Australia
Free mortgage refinance calculator. Compare your current home loan with a new rate to see potential monthly savings, annual savings, and the break-even point after switching costs. Helps you decide whether refinancing is worth it based on your specific situation.
Current Loan
Leave blank to auto-calculate from balance & rate
Only matters for the total-savings line. Leave blank to compare both loans over the same number of years.
Proposed New Loan
The term of the loan you are considering. Most refinances reset the clock to 25 or 30 years.
Switching Costs
- Monthly Savings
- $0.00
- Break-Even
- -
- To recover switching costs
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Should you refinance your mortgage?
Refinancing means replacing your existing home loan with a new one, typically at a lower interest rate. With Australian mortgage holders collectively owing over $2 trillion, even a small rate reduction can translate to significant savings. But refinancing isn't free, you need to weigh the savings against switching costs.
How to calculate refinance savings
There are two formulas that decide whether refinancing is worth it:
Monthly saving = current monthly repayment − new monthly repayment
Break-even (months) = total switching costs ÷ monthly saving
Worked example. Say you owe $450,000 with 25 years remaining at 6.49% p.a., and a new lender offers 5.99% p.a. The current principal-and-interest repayment is about $3,036 a month; the new repayment is about $2,897. That is a monthly saving of roughly $139 (about $1,668 a year). If switching costs total $650 (a $350 discharge fee plus a $300 valuation), your break-even is $650 ÷ $139 ≈ 5 months. After about five months of repayments, every dollar saved is money in your pocket.
The break-even point
The most important number in refinancing is your break-even point: how many months of savings it takes to recover the costs of switching. If your break-even is 6 months and you plan to keep the loan for 10+ years, refinancing is almost certainly worthwhile. If it's 3+ years, think carefully about whether your circumstances might change.
Hidden costs to watch for
Beyond obvious fees, watch for: fixed-rate break costs (can be thousands), clawback periods on cashback offers (2-4 years), losing offset account balances during the switch, and higher ongoing fees that erode rate savings. Always compare the total cost including the comparison rate, not just the headline rate.
Frequently asked questions
How do I calculate my refinance savings?
Work out your current monthly repayment and the new monthly repayment at the lower rate, then subtract: monthly saving = current repayment − new repayment. Multiply by 12 for the annual saving. For example, dropping a $450,000 loan with 25 years left from 6.49% to 5.99% cuts the repayment from about $3,036 to about $2,897, a saving of roughly $139 per month, or about $1,668 a year.
When should I refinance my mortgage?
Consider refinancing when rates have dropped significantly (0.5%+ below your current rate), when your fixed rate period is ending, when your property value has increased enough to remove LMI, or when you want to access equity. Always factor in switching costs and calculate the break-even point.
What are the costs of refinancing?
Common refinancing costs include: discharge fee from your current lender ($150-$400), application fee for the new loan ($0-$600), property valuation ($200-$600), settlement/legal fees ($200-$500), and break costs if exiting a fixed rate (which can be thousands). Some lenders offer cashback to offset these costs.
What is the break-even point?
The break-even point is the number of months it takes for your monthly savings to cover the total switching costs. For example, if refinancing costs $2,000 and saves you $200/month, your break-even is 10 months. Only refinance if you plan to keep the loan longer than the break-even period.
Can I refinance with the same lender?
Yes, this is called a 'rate review' or 'retention offer'. Contact your current lender and ask for a better rate. Many lenders will match competitor rates to keep your business. This avoids switching costs entirely. Always try this before refinancing externally.
What is a cashback refinance offer?
Some lenders offer cashback amounts ($2,000-$4,000+) when you refinance to their product. Most cashback offers have a clawback period (commonly 2-4 years), if you refinance away before then, you must repay the cashback. Always compare the total cost of the loan (rate + fees) over the full term, not just the cashback amount, and check the lender's T&Cs for clawback conditions.
Sources & methodology
How we calculate this
This calculator applies the standard principal-and-interest amortisation formula to your current and proposed interest rates, then compares the two monthly repayments to find your monthly and annual savings. The break-even point is your total switching costs divided by the monthly saving. Total savings over the term nets the proposed loan's repayments plus switching costs against the current loan's repayments over the years each loan actually runs: if you tell it how many years are left on your current loan, it costs that loan over those years rather than over the new term, which is the difference between a real comparison and one that charges your old loan for years it would never have run. It uses the rates and fees you enter rather than any fixed rate of ours, and all figures are computed in your browser, nothing you enter is stored or sent to a server.
Authoritative sources
Reviewed by Bishal Shrestha, Founder of OneBookPlus, 10+ years building tools with Australian tax-agent and BAS-agent practices. Page last reviewed and updated: .
Disclaimer: This tool produces estimates only and is not credit, legal, or financial advice. Lender criteria, APRA buffer changes, and your individual circumstances will affect the actual figure. Speak to a licensed mortgage broker or financial adviser before acting on these results.
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