Mortgage Refinancing Calculator
Find out if refinancing is worth it — calculate your monthly saving, break-even point, and total interest saved.
Is It Worth Refinancing Your Home Loan?
Refinancing — switching your existing home loan to a new lender or product — can save Australian borrowers tens of thousands of dollars over the life of their mortgage. But it's not always the right move. The key question is whether the savings from a lower interest rate outweigh the costs of switching, and how quickly you'll recoup those costs.
How the Refinancing Calculation Works
The calculator uses the standard mortgage repayment formula (PMT) to determine your current and new monthly repayments on the same remaining balance and term. The difference between these two figures is your monthly saving. Dividing your total switching costs by this monthly saving gives you the break-even period — the number of months before refinancing becomes profitable.
For example, if refinancing saves you $300/month and costs $1,500, you break even after 5 months. After that, every month you're ahead. Over a 25-year remaining term, those savings compound into a very substantial sum.
What Are Switching Costs?
Common refinancing costs include a discharge fee from your current lender (typically $150–$400), a new loan application or settlement fee from the incoming lender ($300–$700), and potentially a property valuation fee ($200–$600). Government mortgage registration and discharge fees also apply and vary by state. Total costs for a standard refinance typically range from $1,000 to $2,000. Some lenders offer cashback deals that can offset all or part of these costs — enter a reduced switching cost figure to reflect any cashback received.
When Refinancing Doesn't Make Sense
Refinancing is less beneficial — or may not be worth it at all — if you're on a fixed rate loan with significant break costs, if you plan to sell the property or pay off the loan before the break-even period, or if the rate difference is very small. If the new rate is only marginally lower, the monthly saving may be so small that it takes years to recoup switching costs. As a general rule, a rate difference of at least 0.5% is usually needed for refinancing to make clear financial sense.
Current Refinancing Landscape in Australia (2025)
With the RBA having adjusted rates significantly in recent years, many borrowers who took out loans at peak variable rates may find competitive refinancing options available. The gap between the best available rates and the standard variable rates offered to existing customers — sometimes called the "loyalty tax" — means that switching lenders is often where the biggest savings are found. Always compare the comparison rate, not just the headline rate, to account for ongoing fees.