Compare your current home loan to a new refinanced loan and see your monthly savings and break-even point.
Rates as of Q2 2025 (example)
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This calculator compares your current home loan to a proposed refinanced loan, showing your new monthly repayment, the monthly saving (or increase), total interest under each loan, and how many months it would take to recoup any refinancing costs through monthly savings. It helps you decide whether refinancing makes financial sense — and reveals a critical trade-off: a lower rate combined with a longer term can reduce your monthly repayment while actually costing you more in total interest over the life of the loan.
This calculator computes the standard amortisation payment for both your current loan (remaining balance, current rate, remaining term) and your proposed new loan (same balance, new rate, new term), then compares total interest over each loan's full remaining life and calculates how many months of monthly savings it takes to recover any upfront refinancing costs.
Formula: Monthly Repayment = [Balance × Monthly Rate] ÷ [1 − (1 + Monthly Rate)−Months], where Monthly Rate = Annual Rate ÷ 12. Monthly Saving = Current Repayment − New Repayment. Break-Even Months = Refinancing Costs ÷ Monthly Saving. Total Interest (current) = (Current Repayment × Remaining Months) − Balance. Total Interest (new) = (New Repayment × New Months) − Balance. Lifetime Saving = Total Interest (current) − Total Interest (new).
Example: An A$450,000 loan with a 7% current rate (example rate — enter your actual rate) and 25 years remaining, refinanced to 6% (example rate — enter your offered rate) over a new 30-year term with A$1,500 in refinancing costs: the current monthly repayment is about A$3,180.51 and the new repayment is about A$2,697.98 — a monthly saving of A$482.53, recovering the A$1,500 refinancing cost in just 4 months. However, the total interest on the current loan is about A$504,151.92, while the total interest on the new 30-year loan is about A$521,271.85 — meaning the lifetime interest saving is actually negative: refinancing costs roughly A$17,119.93 more in total interest, despite the lower rate, because the extra 5 years of loan term more than offsets the rate reduction. (Note: this example is for illustration purposes only — actual outcomes depend on your specific loan details.)
Refinancing a home loan is one of the most significant financial decisions an Australian homeowner can make, and the decision is more nuanced than simply chasing a lower interest rate. When refinancing, you may encounter discharge fees (also called exit fees on older loans, though these were banned for loans entered into after 1 July 2011), government fees for discharging and re-registering the mortgage, and new lender application or settlement fees — all of which add to the upfront cost of switching. If you are on a fixed-rate loan, break costs can be substantial and should always be obtained in writing from your lender before proceeding. Beyond the rate, consider whether your new loan has an offset account (which can significantly reduce effective interest), a redraw facility, and how the comparison rate compares — Australian lenders are required under the National Consumer Credit Protection Act (NCCP Act) to disclose a comparison rate that incorporates most fees into a single figure, making true cost comparisons easier. Extending your loan term when refinancing — for example, resetting a loan with 20 years remaining back to a 30-year term — will almost always reduce your monthly repayment but increase total interest paid, as illustrated in the example above. If your goal is reducing total interest cost rather than just monthly repayments, try keeping the new term similar to the remaining term on your current loan, or use the extra monthly payment field to model paying more than the minimum on the new loan.
Not necessarily. A lower interest rate reduces your monthly repayment and can reduce total interest — but only if your new loan term is similar to the remaining term on your current loan. Extending the term significantly (for example, resetting 20 remaining years back to 30 years) can reduce monthly repayments while actually increasing total interest over the life of the loan. Always check the lifetime interest comparison, not just the monthly saving.
Include discharge fees from your current lender, government fees for discharging and re-registering the mortgage (which vary by state), your new lender's application or settlement fees, any legal or conveyancing costs, and — if you're on a fixed-rate loan — the break cost quoted by your current lender. Lenders mortgage insurance (LMI) may also apply if your refinanced loan exceeds 80% of your property's current value.
A break cost (also called an early repayment cost) applies when you exit a fixed-rate home loan before the fixed-rate period ends. It compensates the lender for the difference between your fixed rate and the current wholesale rate for the remaining fixed term, and can be very large if interest rates have fallen since you fixed. Always get a break cost estimate in writing from your lender before deciding to refinance a fixed-rate loan.
The break-even period is the number of months your monthly saving must accumulate to recover the upfront refinancing costs. If you plan to sell or refinance again before reaching the break-even point, you may not recover those costs. A short break-even period (say, under 12 months) generally makes refinancing worthwhile if you intend to keep the loan; a long break-even period (several years) should prompt more careful consideration.
Resetting to a longer term reduces your monthly repayment but extends the period over which interest accrues — often resulting in more total interest paid, even at a lower rate. If your priority is reducing total interest cost, aim to keep your new loan term close to the remaining years on your current loan, or model making extra repayments on the new loan using the extra monthly payment field to offset the effect of a longer term.
Applying for refinancing typically triggers a credit enquiry, which appears on your credit file and can have a small, temporary effect on your credit score. Multiple applications in a short period can have a more noticeable effect. In Australia, your credit file is maintained under the Comprehensive Credit Reporting system, and a refinance will also appear as a new credit account once settled. The effect is generally minor for borrowers with a solid repayment history.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial advice. The interest rates used are examples only and do not represent rates currently offered by any specific lender — actual rates, fees, break costs, and refinancing costs vary by lender, loan type, and individual circumstances and change frequently. Always obtain a written break cost estimate from your current lender and compare the comparison rate across new lenders before making any refinancing decision. Consult a qualified financial adviser or mortgage broker for advice specific to your circumstances.