Refinance Calculator

Enter what you still owe on your home loan, your current rate, the new rate you've been offered, how many years are left, and what it will cost to switch. The calculator compares principal and interest repayments at both rates over the same remaining term.

It shows the monthly saving, the breakeven (how many months of savings it takes to cover the switching costs) and the lifetime saving after costs.

• The lifetime saving assumes the rate gap stays the same for the rest of the loan. In practice rates move, so treat it as a guide.
• Cashback offers aren't included. If a lender offers one, it effectively reduces your switching costs.
• It keeps your remaining term the same. Refinancing onto a fresh 30-year loan lowers repayments further but usually costs more interest overall.

You owe $450,000 with 25 years left at 6.5%, and a new lender offers 5.85%. Switching costs $1,000.

• Repayments drop from $3,038 to $2,858 a month, a saving of $180 a month.
• The $1,000 switching cost is paid back in 6 months.
• Over the remaining 25 years, you'd save about $53,000 after costs.

A small rate cut can take a long time to pay off. On the same $450,000 loan, a cut from 6.5% to 6.25% saves $70 a month, so $1,000 of costs takes 15 months to recover. If the costs are $3,000, even the bigger 0.65% cut takes 17 months.

Before you switch, ask your current lender to match the new rate. Many will, especially if you've been with them a while, and it costs nothing.

• Fixed-rate loans: leaving during a fixed period can mean break costs, which can be thousands of dollars. Ask your lender for a quote first.
• Deposit below 20%: if you owe more than 80% of the home's value, the new lender may charge lenders mortgage insurance again.
• Selling soon: if you plan to sell before the breakeven point, the switch won't pay for itself.

Common costs include a discharge fee from your current lender, an application or establishment fee from the new one, settlement fees, and state government fees to register the new mortgage and discharge the old one. Many lenders waive their own fees to win your business, so the total can be a few hundred dollars or several thousand.

Check the comparison rate as well as the advertised rate, and look at the loan's features. A loan without an offset account may cost you more if you keep savings in your current offset.

If you keep paying your old repayment after refinancing, the difference goes straight off the loan. In the example, keeping repayments at $3,038 a month would clear the loan in about 22 years instead of 25. Try it in the mortgage calculator using extra repayments.