Refinance Savings Calculator Australia

Last updated: May 2026. Reflects current Australian metrics.

Compare your current home loan against a new offer. Factor in discharge fees, break costs, and application fees to find your exact break-even point and lifetime savings.

Current Loan

$
%
Yrs

New Loan Offer

%
Use the comparison rate for accuracy.

Switching Costs

$

Monthly Saving

If you switch to the new rate

$0
Annual Saving $0
Break-Even Point 0 Months

How long it takes for your monthly savings to cover the $750 in switching costs.

Lifetime Comparison

Total Lifetime Saving $0

Refinancing in the Australian Market

Refinancing means moving your home loan from your current lender to a new one, usually to secure a lower interest rate or access cash equity. Australian banks are highly competitive, often offering 'cashback' deals or heavily discounted variable rates to poach customers from their rivals.

The Loyalty Penalty

In Australia, it is well documented by the RBA and ASIC that existing customers pay a "loyalty penalty." Banks often reserve their lowest interest rates exclusively for new customers, leaving existing customers on higher 'back-book' rates. Refinancing every 2-3 years is the most effective way to combat this.

Understanding Break Costs vs Discharge Fees

If you are currently on a variable rate, you can leave your bank at any time. You will typically only pay a 'Discharge Fee' (around $300-$400) and a government mortgage deregistration fee. These are minor costs easily recouped by a lower interest rate.

However, if you are on a fixed rate, your bank may charge 'Break Costs' (or an Early Repayment Adjustment) to compensate them for the interest they are losing. Break costs can run into the tens of thousands of dollars, completely wiping out any potential refinancing savings. Always ask your bank for a break cost quote before proceeding.

Related Calculators

Mortgage Calculator Borrowing Power Stamp Duty

For more information on purchasing property, visit ASIC MoneySmart Home Loans.

10 Frequently Asked Questions

1. What is the current RBA cash rate?
As of 2026, the RBA cash rate influences all variable home loans. Check the official RBA website for the exact daily rate, but currently, variable rates sit around the low 6% mark.
2. How does the 3% serviceability buffer work?
APRA mandates that banks assess your ability to repay a loan at an interest rate 3% higher than the rate you are applying for. This ensures you can handle future rate hikes.
3. What is Lenders Mortgage Insurance (LMI)?
LMI is insurance that protects the lender if you default. It is usually required if your deposit is less than 20% of the property's value (LVR > 80%).
4. Should I choose a fixed or variable rate?
A variable rate offers flexibility (like offset accounts), while a fixed rate provides repayment certainty for a set period (usually 1-5 years).
5. What is a Comparison Rate?
Required by Australian law, the comparison rate rolls the interest rate and most fees into a single percentage to show the true cost of a loan.
6. What is an offset account?
An offset account is a savings account linked to your loan. Its balance is subtracted from your loan principal before interest is calculated, saving you money.
7. Can I make extra repayments?
Yes, most variable loans allow unlimited extra repayments. Fixed loans usually cap extra repayments (e.g., $10k/year) and charge break fees if exceeded.
8. What is negative gearing?
Negative gearing is an Australian tax strategy where the costs of owning an investment property exceed its rental income, allowing you to deduct the loss from your taxable income.
9. What are stamp duty concessions?
Each Australian state offers stamp duty exemptions or concessions for First Home Buyers purchasing below a certain price threshold.
10. How is interest calculated?
In Australia, home loan interest is generally calculated daily on your outstanding balance and charged monthly.