Refinance
Calculator Australia 2026
See what switching actually does to what you own — the monthly saving, the break-even month, and the change in total interest. Refinancing does not move your equity on day one; it moves your cash flow, your payoff date and your lifetime interest, and the calculator shows all three.
Read the full answer — method, rates and figures
Quick answer: Break-even formula: total switching costs ÷ monthly savings. Australian refinance switching costs typically include: discharge fee (~$150-400), settlement/title transfer ($300-600), application fee ($0-995 depending on lender), valuation ($0-500).
Many lenders offer cashback incentives ($2,000-4,000) that offset switching costs. Loyalty tax research from the ACCC and Reserve Bank shows existing variable-rate borrowers commonly pay 0.3-0.5 percentage points more than new customers, so refinancing can capture this gap.
Fixed-rate break costs (if currently in fixed period) can be substantial.
Includes discharge fee, application fee, valuation, legal costs
Fixed-rate break costs or early termination fees
Monthly Savings
$251.91
Break-Even Point
8 months
Total Savings Over Term
$73,573
Save your refinance result
Track your loan balance, rate and home equity together, and see the saving add up.
Monthly savings
$251.91
Break-even point
8 months
Total savings over term
$73,573
Loan balance
$500,000
Detailed Breakdown
What this means for you
Refinancing your $500,000 loan from 6.80% to 5.99% saves you $251.91 per month. With $2,000 in refinancing costs, you break even in 8 months. Over the remaining 25 years, you will save a total of $73,573 after costs. With a break-even period under two years, this refinance looks financially worthwhile.
Last reviewed 9 October 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
This is the textbook answer. Want to see this calculated against your actual accounts?
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A refinance changes your repayment today and your payoff date for the next 25 years. Richify keeps your property and its mortgage beside your super, shares and savings, so you can see what the switch did to your net worth rather than just to your monthly bill. 7-day free trial, no ads.
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The refinance break-even calculator helps you determine whether switching your home loan to a lower interest rate will save you money after accounting for all refinancing costs. The core calculation is straightforward: divide your total refinancing costs by the monthly repayment savings to find the break-even point in months. Before that point, the upfront costs outweigh the savings. After it, every dollar saved goes directly into your pocket. This simple metric tells you exactly how long you need to stay with the new loan before refinancing becomes worthwhile.
For example, refinancing a $500,000 loan with 25 years remaining from 6.80% to 5.99% reduces your monthly repayment from $3,470 to $3,218 — a saving of $252 per month. With $2,000 in refinancing costs, your break-even point is 8 months. Over the remaining 25 years, keeping the same end date, you save about $75,600 in total interest. The monthly repayment is calculated using the standard annuity formula, the same method Australian lenders use. It takes your loan balance, applies compound interest over the remaining term, and produces a fixed monthly amount that fully repays both principal and interest by the end of the loan.
Costs to Factor In
Refinancing is not free, and understanding the full cost is essential for making an informed decision. The discharge fee charged by your current lender typically ranges from $150 to $400 and covers the administrative cost of closing your existing loan and deregistering the mortgage from the property title. Your new lender may charge an application or establishment fee of $0 to $600, though many competitive lenders waive this entirely. A property valuation is usually required by the new lender to confirm the current market value of your home, costing between $200 and $600 depending on the property type and location. Legal and settlement fees cover the conveyancing work needed to transfer the mortgage between lenders, typically $200 to $500. If your loan-to-value ratio increases above 80 percent as a result of the refinance, you may also need to pay Lenders Mortgage Insurance, which can add thousands to the cost. Always request a full cost breakdown from both your current and new lender before committing.
When Refinancing Makes Sense
Refinancing is most beneficial when three conditions align. First, the interest rate difference between your current loan and the best available rate is at least 0.50 percentage points. On a $500,000 loan, a 0.50% reduction saves roughly $160 per month, which adds up to nearly $48,000 over 25 years. Second, you have a substantial remaining loan term, ideally more than 10 years. The longer the remaining term, the more months of savings you accumulate, amplifying the benefit of even a modest rate reduction. Third, the break-even period is comfortably short, ideally under two years. A short break-even period means you recoup your refinancing costs quickly and spend the majority of your remaining term enjoying lower repayments. Additional triggers include gaining access to better loan features such as a full offset account, redraw facility, or flexible repayment options that your current loan does not offer.
When Refinancing Does Not Make Sense
Refinancing is not always the right move. If you are on a fixed rate with a significant remaining fixed period, the break costs can easily outweigh any savings from a lower variable rate. Fixed-rate break costs are calculated based on the difference between your contracted rate and the prevailing wholesale rate, multiplied by your loan balance and remaining fixed term. These costs can run into tens of thousands of dollars. Refinancing also makes little sense if you are near the end of your loan term. With only a few years remaining, the monthly savings are small and the break-even period may exceed your remaining term. Similarly, if your property value has declined and your LVR has increased above 80 percent, the cost of paying LMI again could negate any rate savings. Finally, if your credit score has deteriorated since you took out your original loan, you may not qualify for a better rate, or you may face higher pricing from the new lender.
How to Use This Calculator
Start by entering your current outstanding loan balance, which you can find on your latest mortgage statement or in your online banking portal. Next, enter the interest rate you are currently paying and the new rate you have been quoted or found through comparison shopping. Set the remaining term on your existing loan in years. Then enter the estimated refinancing costs, using $2,000 as a reasonable starting point for most straightforward refinances. If you are breaking a fixed rate early, add the estimated break cost in the exit fees field. The calculator will instantly show your current and new monthly repayments, the monthly and annual savings, the break-even month, and the total savings over the remaining loan term after deducting all refinancing costs. Try adjusting the inputs to model different scenarios, such as a slightly higher or lower new rate, to see how sensitive the savings are to rate changes.
What refinancing actually does to your net worth
On settlement day, almost nothing. Your home is worth what it was worth the day before, and you owe what you owed the day before, so your equity — the value of the property minus the loan against it — is unchanged by the switch itself. If you capitalise the switching costs into the new loan rather than paying them up front, your equity actually falls by exactly that amount: add $2,000 of costs to the balance and you own $2,000 less of your own house until you pay it back.
What refinancing does move is three things, and only one of them shows up in your bank account this month. It changes your cash flow, which is the number every comparison site leads with. It changes the speed your debt shrinks, because at a lower rate more of an unchanged repayment goes to principal — that is the part that builds equity, and it compounds quietly for years. And it changes your total interest, which is the real price of the loan. A mortgage is usually the largest single liability an Australian household has, so the honest way to judge a refinance is against your whole position, not against your old repayment. Work out how much equity you actually hold and what share of your wealth sits in the house, and compare the result with the average Australian net worth for your age.
The reset-to-30-years trap
This is the one thing a lower rate can hide, and it is the reason to enter your remaining term above rather than a fresh 30 years. Most refinances are written as a brand-new loan, and the default new loan is 30 years. Take the same $500,000 with 25 years left at 6.80%. Refinance to 5.99% and keep the original end date and the repayment falls from $3,470 to $3,218 — $252 a month — and you pay about $75,600 less interest. Refinance to the same 5.99% but reset the term to 30 years and the repayment falls to $2,995, a much more attractive $476 a month.
The second option costs you about $112,500 more interest than the first. Worse, it costs roughly $37,000 more than not refinancing at all — a lower interest rate that ends up more expensive, because five extra years of interest outweighs the rate cut. Nothing is being hidden from you when this happens; the larger monthly saving is real, and stretching the term is a legitimate choice if cash flow is the problem you are solving. But it is a different decision from saving money, and the number that tells you which one you made is total interest, not the monthly repayment. If you do extend, the fix is to keep paying the old amount: the surplus goes straight to principal and you get the cash-flow safety net without the extra decade of interest.
How to use this calculator
- Enter your current loan balance using the slider or type the value directly. This is the outstanding amount you still owe on your existing mortgage, not the original loan amount or the property value.
- Set your current interest rate. Check your latest loan statement or online banking portal for the exact rate you are currently paying. This is used to calculate your existing monthly repayment.
- Enter the new interest rate you have been offered or are considering. Compare rates from multiple lenders, brokers, and comparison sites. Remember to check the comparison rate, not just the headline rate.
- Adjust the remaining loan term. This is how many years you have left on your current mortgage. A longer remaining term means more potential savings from a lower rate.
- Enter your estimated refinancing costs including discharge fee, application fee, valuation, and legal fees. Use the default of $2,000 as a starting point and adjust based on quotes from your new lender. Add any exit fees if you are breaking a fixed rate early.
❓ Frequently Asked Questions
When should I refinance my mortgage in Australia?
Consider refinancing when the rate difference is at least 0.50% p.a., you have more than 10 years remaining on your loan, and the break-even period is under two years. Major life changes like a salary increase or improved credit score can also create favourable refinancing conditions.
What are the costs of refinancing?
Refinancing costs in Australia typically range from $700 to $2,500. Common costs include a discharge fee ($150 to $400), application fee ($0 to $600), property valuation ($200 to $600), and legal or settlement fees ($200 to $500).
Some lenders offer cashback deals or fee waivers to offset these costs.
What is a discharge fee?
A discharge fee is the administrative charge your current lender imposes when you pay off and close your existing mortgage, typically $150 to $400. It covers deregistering the mortgage from the property title with the relevant state land titles office.
How do I calculate my refinance break-even point?
Divide your total refinancing costs by the monthly savings from the new lower rate. For example, if refinancing costs $2,000 and your new repayment is $270 less per month, your break-even point is approximately 8 months.
After that, every month of savings is pure benefit.
Can I refinance from a fixed rate to variable?
Yes, but you may face significant break costs if your fixed term has not expired. Break costs can range from a few hundred dollars to tens of thousands depending on the remaining fixed period and how wholesale rates have changed.
Once the fixed period ends, you can refinance without break costs.
What is LMI clawback?
LMI clawback occurs when you refinance within two to three years of paying Lenders Mortgage Insurance. Your original lender may seek a partial refund from the insurer, but this goes to the lender, not you.
If your new loan also exceeds 80% LVR, you may need to pay LMI again.
Will refinancing affect my credit score?
Refinancing can have a minor short-term impact on your credit score due to the hard credit inquiry. However, if you make a single application and continue timely repayments, the impact is typically minimal and recovers within a few months.
Avoid multiple applications in a short period.
How much can I save by refinancing?
Savings depend on the rate difference, loan balance, and remaining term. Reducing your rate by 0.50% on a $500,000 loan with 25 years remaining saves roughly $160 per month or $48,000 over the loan life.
A 1.00% reduction saves around $310 per month or $93,000 in total.
What is a cashback refinance offer?
A cashback offer is a lump sum ($2,000 to $4,000) some lenders pay as an incentive to switch. While it can offset refinancing costs, compare the total cost of the loan over its full term.
Some cashback loans have higher rates or fewer features like offset accounts.
Should I refinance to consolidate debt?
Rolling high-interest debts into your mortgage lowers monthly payments, but spreading short-term debt over 25 to 30 years can cost more in total interest. If you consolidate, make extra repayments to clear the amount quickly.
Increasing your loan balance may also push your LVR above 80% and trigger LMI.
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Further Reading
Your home + super + savings — one number, kept live
A refinance changes your repayment today and your payoff date for the next 25 years. Richify keeps your property and its mortgage beside your super, shares and savings, so you can see what the switch did to your net worth rather than just to your monthly bill. 7-day free trial, no ads.
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