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.
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Monthly Savings
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Break-Even
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To recover switching costs
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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.
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 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.
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.
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.
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.
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.
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.
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.
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
This calculator applies the standard principal-and-interest amortisation formula to your current and proposed interest rates over the remaining loan term, 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, and total savings over the term nets the proposed loan's repayments plus switching costs against your current loan. It uses the rates and fees you enter rather than any fixed FY 2025-26 rate, 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. Last reviewed and updated: May 2026.
Disclaimer: This calculator produces estimates only and is not tax advice. Tax outcomes depend on your individual circumstances. For decisions that affect your tax position, consult a registered tax agent or the ATO directly.
OneBookPlus handles invoicing, GST tracking, BAS prep, and ATO lodgement automatically.
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