Enter your loan, the rate you're paying and the rate you've been offered, then what switching costs. You'll see the monthly saving, the month it pays those costs back, and where you stand after one, three and five years.
Monthly repayment—
Where you stand
After
Cash ahead
Owe less by
What the calculator follows
Both loans are principal and interest on the same balance over the same remaining term, so the only thing that changes is the rate. The monthly saving is the difference in repayment, and the break-even month is the first month those savings add up to your costs, less any cashback. Moneysmart lists the same costs to weigh: a discharge fee on the old loan, an application fee on the new one, a break fee on a fixed loan, and possibly LMI (Moneysmart, switching home loans).
The simplifications, so you can discount them. Rates stay where they are for the whole comparison, because nothing here guesses where they go. Costs are paid in cash on day one rather than added to the loan. The term isn’t reset: stretching a switch back to 30 years lowers the repayment further but costs more interest over the life of the loan, and this calculator won’t flatter a switch that way. The “owe less by” column is the other half of the saving: at a lower rate more of each repayment goes to principal.
Before you switch
Ask your current lender to match first; if it does, the break-even is immediate. Our guide to the cost of refinancing covers that conversation, cashback against rate, and the costs people forget. Our refinancing page covers how we run a switch. This page is general information, not advice.
Got an offer? We'll check it against your costs and your current lender.
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Because switching costs money up front, and a small rate cut can take years to pay it back. The break-even month is when the lower repayments have covered those costs. Before it, you're behind; after it, you're ahead.
Why won't the calculator estimate my break cost?
Only your lender can work out a fixed rate break cost, and it moves with wholesale rates from day to day, so any figure we guessed would be wrong in a way that matters. Ask your lender for a written quote, note the date it's valid until, and enter it here.
Should I ask my current lender first?
Moneysmart suggests telling your lender you're planning to switch, because it may cut your rate to keep you. If it matches, you save the switching costs entirely, and the calculator will show that as a break-even of month zero if you enter no costs.
What about cashback offers?
Enter the cashback and it comes off your costs. Read the conditions first: offers usually set a minimum loan size and an LVR band, and some ask for part of the cashback back if you leave within a set period. A cashback can hide a higher rate, which the monthly saving will show.
Do I pay LMI again?
Possibly. Moneysmart notes that with less than 20% equity you might have to pay lenders mortgage insurance on the new loan. Enter it under other costs if it applies.