Compare a refinance on equal terms
Switching a mortgage is more than comparing advertised rates. A lower rate may change the repayment, but discharge costs, application charges, valuation fees, ongoing fees and the remaining term all affect whether a move recovers its upfront cost.
Use this scenario to put the existing and proposed loans on the same balance and remaining term. Check whether a new term, changed repayment type, offset access or a fixed-rate break cost would make the real comparison different. It helps frame questions for a broker or lender, rather than deciding eligibility, approval or which product is suitable.
How to read the results
Monthly saving including fees compares the calculated principal-and-interest repayments plus the entered monthly fees. A monthly cost increase means the proposed scenario costs more under these assumptions.
Break-even is the whole month in which cumulative monthly saving exceeds switching costs. Net saving after costs applies that monthly difference for the full remaining term then subtracts switching costs; it is not a prediction of future rates. It does not discount future cash flows to today’s dollars.
Worked example
For a $650,000 balance with 25 years left, moving from 6.79% to 6.04% produces estimated loan repayments of $4,507 and $4,204 per month. With $10 monthly fees on each loan, the monthly saving is $303.
Against $1,500 of switching costs, break-even rounds up to five months. Holding every input constant for 25 years gives a modelled net saving after costs of about $89,547.
Assumptions and limitations
- Both scenarios use the same $650,000 starting balance and 25-year remaining term.
- Rates and monthly fees remain constant for the whole modelled term.
- The entered $1,500 switching cost is paid once and is not added to the new loan.
- Repayments are monthly principal-and-interest calculations.
- Cashback offers, package benefits, tax effects and break costs beyond the entered amount are excluded.
Frequently asked questions
Why can a lower rate still be unsuitable to switch to?
Costs, features, loan conditions, fixed-rate break costs and the time you expect to keep the loan can all matter.
What does Not reached for break-even mean?
The calculated monthly saving is not positive enough to recover switching costs within the selected remaining term.
Can I compare different loan terms?
This tool intentionally holds the term equal. A different term changes repayments and is not a like-for-like rate comparison.
This calculator and supporting information provide general estimates only. They do not take account of every product rule, tax consequence or personal circumstance and are not financial, tax, credit or legal advice.