Calculator
Refinance savings calculator
A lower rate is not automatically a saving. This works out the monthly difference, the break-even point after switching costs, and the net effect over your remaining term.
You'd save
$288
per month, before switching costs
- Repayment now
- $3,462
- Repayment after switching
- $3,175
- Break even after
- 3 months
- Net saving over the remaining term
- $85,553
At that rate you would pay more, not less. Switching only helps if the new rate is below your current one — or if it buys you a feature you actually need.
Assumes you keep the same remaining term and both rates hold. Stretching the term back out to 30 years lowers the repayment but usually raises the total interest. When refinancing is worth it covers the traps.
How this is calculated
Both repayments are calculated on your current balance over the years you have remaining — not a fresh 30-year term. The monthly saving is the difference between them. Break-even is your switching costs divided by that monthly saving, and the net saving is the total monthly saving across the remaining term less the switching costs.
The term reset trap
If a lender quotes you a new loan over 30 years when you had 22 left, the repayment will fall much further than the rate change alone justifies — and you will pay substantially more interest overall. Ask for the new loan over your remaining term so you are comparing like with like. If you genuinely need a lower repayment for cash-flow reasons that is a legitimate choice, but make it knowingly.
Fixed loans need a phone call
Break costs on a fixed loan are not a set fee — they are calculated on the lender's loss if wholesale rates have moved since you fixed, and on a large balance they can reach five figures. Do not estimate this. Ask your lender for a written figure before you do anything else.
When refinancing is worth it walks through the whole decision, including when it quietly is not worth doing.
FAQ
Refinancing questions
What should I put for switching costs?
For a variable-rate loan, $500 to $1,200 covers it in most cases: a discharge fee from your current lender, possibly an application and valuation fee at the new one, and state land titles charges. Many lenders waive their own fees to win the business, so ask. If you are on a fixed rate, ring your lender for a written break cost figure first — it can be far larger.
Why does the calculator ask for years remaining rather than a new term?
Because resetting a 22-year loan back to 30 years is where misleading savings come from. The repayment drops sharply, but you add eight years of interest. Comparing over your existing remaining term shows the true effect of the rate change alone.
Should I ring my current lender first?
Yes, always. Retention teams have discretion that the advertised rate does not show, and matching a competitor is cheaper for them than losing you. Mention you have been comparing. It is one free phone call and it works often enough to be worth making before any paperwork.
What about cashback offers?
They are real money and occasionally the best deal available, but check the ongoing rate too. A $3,000 cashback attached to a rate 0.4% above market costs you more than it pays within about two years on a typical loan. Work out the total cost over three years including the cashback, then compare.
Could refinancing be declined?
Yes. It means a fresh serviceability assessment, so if your income has fallen, you have moved to self-employment, or you are on parental leave, you may not qualify — and a declined application leaves a mark on your credit file. Check your position before applying.