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Refinance Savings Calculator

Compare what your current loan costs against a new one, and see how long the switching costs take to pay for themselves.

Indicative only · not an offer of credit

The loan you have

What you owe today, not what you originally borrowed.

Read it off your last statement. The figure loaded here is an editable placeholder, not a rate anyone is offering.

Years left on the loan as it stands, not the original thirty.

The loan you are considering

A figure to test, not a rate we are quoting. Rates move, and the rate you are offered depends on the lender, the loan-to-value ratio and your file.

Most refinances reset to a new thirty-year term. Setting this longer than your remaining term is the single easiest way to look better monthly and be worse off overall.

What switching costs

A placeholder. Your loan contract states the real figure — replace this with it. A loan still inside a fixed period can also carry a break cost, which is not modelled here.

Some lenders waive it. Some do not.

Discharging one mortgage and registering another. Set by your state or territory.

Where refinances go wrong

A lower rate is not the same thing as a cheaper loan. Reset a loan with twenty-one years left back to thirty and the repayment drops, because the debt now has nine more years to sit there earning interest. That can still be the right call when cash flow is the problem you are solving. It is only the wrong call when nobody told you it was happening.

Assumptions
  • Both loans are principal and interest, repaid monthly, with the rate held constant for the whole term. Real rates move, and a variable rate will not stay where you typed it.
  • The new loan is written for the same balance you owe today. Switching costs are treated as paid up front, not added to the loan. Capitalising them would raise the new repayment and push the break-even out.
  • Ongoing account fees, package fees, annual fees, offset account fees and lenders mortgage insurance are not included on either side.
  • Fixed-rate break costs are not modelled. If your loan is inside a fixed period, ask your lender for the break figure before you go any further — it can be large enough to settle the question on its own.
  • Break-even is switching costs divided by the monthly saving. It ignores what you would have earned on that money elsewhere, and it assumes you keep the new loan long enough to reach it.
  • Interest totals are calculated over each loan’s full term, so a longer new term is compared honestly against a shorter remaining one rather than against a matching slice of it.
  • Cash-back offers, rebates and introductory periods are not counted.

Lower each month by

$201

That is $2,411 a year of cash flow, before you count what the switch costs to make.

Current repayment, monthly
$4,389
New repayment, monthly
$4,188
Cost of switching
$350
Break-even
2 months
Interest on the loan you have (25 years)
$666,654
Interest on the new loan (25 years)
$606,388
New loan plus switching costs
$606,738
Saved over the life of the loan
$59,916
Saved if you keep the 25 years you have left
$59,916
Repayment now$4,389
Repayment after switching$4,188
Total interest, loan you have$666,654
Total interest plus costs, new loan$606,738

Send us the loan you have — the rate, the balance, the term left and whether any of it is fixed. We will tell you straight whether moving is worth it, including when the answer is that you should stay where you are.

Have us check the numbers
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How to read the result

Two loans, side by side. The tool compares the repayment and total interest on what you have now against what you are considering, and works out how many months of saving it takes to cover the cost of switching.

The break-even month is the real answer

A monthly saving is easy to like. The question that matters is how long you keep it. If switching costs take eighteen months of savings to recover and you expect to sell in a year, the refinance loses money even though the rate is better.

Watch the term, not only the rate

Refinancing a loan with twenty-one years left back to a fresh thirty-year term lowers the repayment immediately. It also adds nine years of interest. That is not automatically wrong, and for a household under pressure it can be the right call, but it should be a choice rather than a side effect. Where the new lender allows it, set the term to match what is left on the old loan and compare again.

The assumptions behind the comparison

  • Both rates hold for the full term being compared. Variable rates do not.
  • The new loan starts at the current balance of the old one, plus any costs you have chosen to capitalise.
  • Repayments are made on schedule, with no extra payments and no redraw.
  • The comparison runs to the end of the term, though most loans are refinanced or repaid earlier.
  • Only the fees you enter are counted.

If you plan to make extra repayments or hold savings in an offset, model that separately. Either can change which of two loans is genuinely cheaper.

What the comparison does not account for

  • Discharge fees on the existing loan, and break costs where any part of it is fixed.
  • Application, valuation, legal and settlement fees on the new loan.
  • Mortgage registration and other government charges.
  • Lenders mortgage insurance, which is generally not transferable between lenders and may be payable again.
  • Ongoing account or package fees, which can outweigh a small rate difference on a smaller balance.
  • The value of features: offset accounts, redraw, split loans, repayment flexibility.
  • Cashback offers, and whatever conditions attach to them.

Break costs on a fixed loan deserve particular care. They are calculated by the lender on its own funding position and can be significant, so ask for a written figure before you decide rather than estimating it.

If the loan is against an investment property, the tax treatment of any change is a matter for your registered tax agent. Refinancing can alter the deductible portion of interest, particularly where the loan amount increases.

How a lender's assessment differs

A refinance is a new loan application, assessed from the beginning. Being a good payer on the existing loan helps, but it does not substitute for servicing.

  • Income and expenses are verified again, at today's figures rather than the ones that supported the original loan.
  • Servicing is tested at a buffered rate above the new loan's actual rate.
  • The property is revalued, and a lower valuation than expected can change the loan-to-value ratio and the pricing.
  • Repayment history on the existing loan is reviewed, and arrears matter.
  • Where the refinance also consolidates other debts, the lender will want evidence of those balances and will usually pay them out directly at settlement.

Circumstances change between loans. Someone who has moved from salaried work to self-employment, or added dependants, can find that a lower rate is available in the market and not available to them from that particular lender. That is a policy problem, and policy problems are solved by choosing a different lender rather than a different rate.

What to do next

  1. 01Find your current rate, balance and remaining term on your latest statement.
  2. 02Ask your existing lender for a discharge figure, including break costs if any part is fixed.
  3. 03Ask them what rate they would offer to keep you. Sometimes that is the shortest path.
  4. 04Run the comparison on the same term as the loan you hold now, then again on a longer one, and look at both.
  5. 05Bring the two options to a broker and check the whole cost, not the headline.

If the reason for refinancing is debt rather than rate, use the debt consolidation calculator as well. Those two conversations usually belong together.

FAQ

Questions people actually ask

If yours is not here, ask it. We would rather answer the awkward one early than have you find out later.

1300 015 267
Is this a quote for a new loan?
No. It is an indicative comparison of the figures you entered. It is not an offer of credit, not a quote and not an approval. Any real refinance is subject to a lender assessing your income, credit file and property.
What is the break-even point?
The number of months of savings needed to recover the cost of switching. If you expect to sell, repay or refinance again before that month arrives, the switch costs more than it saves.
Will refinancing reset my loan term?
By default, usually yes. Many refinances start a fresh term, which lowers the repayment and increases total interest. Ask for the term to match what is left on your current loan if the lower lifetime cost is what you want.
What are break costs?
A charge that can apply when a fixed rate loan is repaid or changed before the fixed period ends. The lender calculates it on its own funding position, so ask for a written figure rather than estimating it.
Do I pay lenders mortgage insurance again?
Possibly, if the new loan is above that lender's loan-to-value threshold. It is generally not transferable between lenders. If your property has grown in value or the balance has fallen, you may now sit below the threshold entirely.
Can I consolidate other debts into a refinance?
Often, yes, and it is one of the more common reasons people refinance. The lender will want to see the balances and will usually pay them out directly at settlement rather than sending you the funds.
Is a cashback offer worth chasing?
Sometimes, and sometimes it is attached to a rate that costs more over a few years than the cashback returns. Compare the whole cost of the facility over the period you actually expect to hold it, and check the conditions.
How long does a refinance take?
It depends on the lender, the valuation and how quickly the outgoing lender releases the security. Having documents ready before the application goes in is the part most within your control.

Credentials

  • Credit Representative 554029
  • ABN 20 672 801 651
  • FBAA member
  • AFCA external dispute resolution

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Where this applies

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Understand the mechanism

A calculator cannot see your whole file.

It works from what you typed. We work from what a lender will actually assess — and we would rather tell you the real answer early.

Or call us

1300 015 267

Monday – Friday, 09:00 to 17:30

Dave Pham, Head Broker at WeL'nd

“Tell me the number. I have almost certainly seen worse.”

Dave Pham · Head Broker

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