What does refinancing cost?
Ask for an itemised quote covering discharge and fixed-rate break fees, application, valuation and legal charges, and any new lenders mortgage insurance. Ask your current lender whether it can improve your rate before switching.
Enter one-off charges as switching costs and ongoing loan fees separately. Use the actual interest rate rather than the comparison rate, because this tool adds your entered fees itself. A blank cost is unconfirmed: use zero only when you have checked there is no charge.
Worked example: switching with 20 years left
A $500,000 loan at 6.5%, with 20 years remaining, switches to 6% for the same 20 years. Switching costs are $3,000, paid upfront. Both loans are principal and interest, with no offset or recurring fees. Rates stay unchanged. These are illustrative rates, not current offers.
- Current monthly repayment
- $3,728
- New monthly repayment
- $3,582
- Interest saved over five years
- $12,190
- Upfront switching costs
- $3,000
- Net savings after five years
- $9,190
- First break-even month
- Month 15
At five years, the current loan has $427,946 remaining; the new loan has $424,498. Cash paid is $5,743 lower after upfront costs. The rest of the net saving is the reduction in debt.
Open these figures in the calculator. Results are rounded to whole dollars; calculations retain full precision.
Lower repayments and net savings answer different questions
Monthly outflow tells you how the first month's budget changes, including one twelfth of annual loan fees. Net savings compare both loans at the same date, after switching costs and the remaining debt. Paying less principal each month can improve cash flow without making the loan cheaper.
Costs added to the new loan are counted once. Interest on those financed costs is included in the new loan's interest.
How long does it take to break even?
In the example, the first break-even point is month 15. It is the first month that accumulated interest and fee savings cover the $3,000 switching cost. Dividing that cost by the reduction in repayments answers a different cash-flow question, because repayments also include principal.
The calculator searches both full loan terms for first cost recovery, even if it happens after your chosen comparison period. If you plan to sell or refinance again sooner, check net savings at that earlier date. A recovery date can also reverse later; the results flag that when it happens.
What if you extend the new loan to 30 years?
Keeping the example's other inputs, a 30-year new term lowers the starting payment to $2,998, about $730 less each month. But it leaves $465,272 owing at five years. Across both full terms, the switch costs $187,503 more, including the switching costs.
A smaller payment may help your budget. Check the debt left and full-term cost to understand the trade-off.
When might refinancing not recover its costs?
Try a shorter comparison period, a smaller rate reduction or higher quoted switching costs. If net savings are negative at your chosen date, the current loan is cheaper over that period under those assumptions. No recovery date means the costs are not recovered within the model's full-term comparison. A result is a scenario, not a prediction of your future rate or approval.
Refinancing an investment property
The loan-cost comparison can be used for an investment property or your own home. It is before tax and does not assess loan eligibility, rental income, deductibility or cash-out borrowing. If you want to borrow extra, this same-balance comparison is not a complete assessment of that decision.
Keep the offset amount consistent: the model holds the same balance against both loans and assumes it offsets interest fully. Enter each loan's remaining interest-only period separately. When it ends, the model switches to principal and interest over that loan's remaining term. See interest only versus principal and interest.
After comparing loan costs, use the rental property cash-flow calculator to consider the ownership budget. See the methodology for monthly calculation timing and exclusions, including changing rates, tax and returns on repayment differences.
Sources checked 13 October 2026: ASIC Moneysmart: switching home loans and mortgage switching calculator. The examples above use BrickOutlook's own model.