Projected mortgage balances
Existing mortgage compared with the selected refinance offer
Australia · AUD
See How Switching Home Loans Could Affect Your Budget
Compare your existing mortgage with two refinancing offers, including switching expenses, quoted break costs, additional borrowing and the balance remaining after your chosen period.
Compare the refinancing offers
Includes entered costs, their selected treatment, additional funds and debts added to the mortgage
| Scenario | Rate | Term | Opening balance | Monthly repayment | Upfront cost | Simple break-even | Balance at comparison date | Comparative result |
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Offer A interest-rate sensitivity
How the repayment and comparative position change if the new rate differs from the entered offer
| Rate adjustment | Adjusted rate | Monthly repayment | Simple break-even | Result at comparison date |
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This calculator provides a general planning illustration only. It is not a lender quote, payout statement, valuation, tax calculation, credit decision or recommendation. Confirm break costs, discharge and registration fees, possible duty, LMI, serviceability requirements and the complete terms of each loan.
Australian refinancing guide
What changes when you refinance a home loan?
Refinancing replaces an existing mortgage with a new loan. The replacement may involve a different lender, interest rate, loan term, repayment structure, fee schedule or set of features. It can also include additional borrowing or the consolidation of other debts that are paid out at settlement.
A lower advertised rate is only one part of the comparison. Switching costs, the opening balance of the new loan and the number of years over which the debt will be repaid can all influence whether the refinance is genuinely beneficial.
This calculator compares loans at a user‑selected date. Reviewing the repayment and remaining balance together helps identify cases where a smaller monthly payment is mainly the result of extending the loan rather than reducing its cost.
Costs to collect before comparing refinance offers
Begin by requesting a current payout figure from your existing lender. The amount required to close the mortgage may differ from the balance shown in online banking because of accrued interest, fees and transactions that have not yet been processed.
Other possible expenses include discharge fees, mortgage registration charges, new‑lender application or settlement fees, valuation costs, legal expenses and any fixed‑rate break cost. The exact combination depends on the current contract, the new lender, the property and the location.
Cashback offers can offset some upfront costs, but they should be assessed alongside the interest rate, annual fees, loan features, eligibility requirements and any minimum‑term conditions.
MoneySmart recommends confirming that the financial benefit outweighs the cost of switching and considering the length of the replacement loan. Read its guidance on switching home loans.
Rate or product change
The mortgage is moved to a different rate or product without substantial additional borrowing. Using a term close to the time remaining on the current loan can make the schedules easier to compare.
Additional funds
A larger replacement loan may release money for renovations, investment or another approved purpose. The funds are received by the borrower but remain debt that will accrue interest.
Debt consolidation
Credit cards, personal loans or other debts may be paid out through the new mortgage. The immediate repayment may fall, but the consolidated amount can become expensive if it remains in the mortgage for many years.
Existing‑lender switch
The current lender may offer a retention rate or another product without requiring a full external refinance. Compare any internal offer with the complete cost and features of moving elsewhere.
Why fixed‑rate break costs need a lender quote
Leaving a fixed‑rate mortgage before its fixed period ends may result in a break cost. The calculation can depend on the remaining fixed period, outstanding balance, contractual method and movements in relevant market or funding rates.
The amount can change as market conditions and the loan balance change. A general percentage is not a reliable substitute for a current written quote from the lender.
Enter the quoted amount in the calculator and consider how long you expect to keep the replacement loan. A refinance that appears attractive before the break cost is entered may become less favourable once that expense is included.
Two different ways to examine break‑even
A simple repayment break‑even divides upfront switching costs by the reduction in monthly outgoings. For example, $2,400 of costs and a $200 monthly reduction produce a simple break‑even of 12 months.
This shortcut is most informative when the old and new loans have similar balances and repayment periods. It can give an incomplete picture when costs are financed, the new term is longer or additional funds are borrowed.
The comparison‑date result addresses this by also examining how much debt remains under each scenario. If the refinanced loan leaves a larger balance, some of the apparent cash‑flow benefit may come from postponing principal repayment rather than reducing the cost of the debt.
Cash out must be separated from refinancing savings
Additional funds released through refinancing increase the replacement loan. They may provide useful cash, but they are not interest savings or a lender incentive. They must eventually be repaid with any interest charged under the new mortgage.
The lender may require evidence of the purpose and may apply limits or additional documentation. The larger balance can also raise the LVR and reduce the owner’s remaining equity.
Where borrowed funds are used for an income‑producing purpose, tax treatment generally depends on how the money is used rather than which property secures it. Keep loan purposes clearly documented and obtain qualified tax advice.
Debt consolidation can improve cash flow without reducing cost
Moving a short‑term debt into a mortgage may replace a high interest rate with a lower home‑loan rate. However, extending that balance across a long mortgage term can create more interest than repaying it over its original shorter schedule.
The entered “monthly repayments replaced” amount shows the immediate cash‑flow effect. It does not reconstruct the original interest rates, fees or payoff dates of the debts being consolidated. A complete assessment should compare those original schedules with a disciplined payoff period inside the new loan.
Securing previously unsecured debt against a home also changes the consequences of non‑payment. MoneySmart discusses these risks in its debt consolidation and refinancing guide.
Refinance LVR and possible LMI
The refinance LVR compares the opening balance of the new mortgage with the property value accepted by the new lender. Additional funds, consolidated debts and financed switching costs can all increase that balance.
If the lender’s valuation is lower than expected, the LVR will be higher. MoneySmart notes that borrowers with less than 20% equity may need to pay LMI when changing loans. The result depends on the lender, insurer, borrower and property.
LMI previously paid on the existing mortgage does not normally transfer automatically to a new lender. Obtain an actual quote if the proposed refinance is near or above an 80% LVR.
The assessment‑rate result is not an approval
APRA‑regulated authorised deposit‑taking institutions currently apply a serviceability buffer of at least three percentage points above the mortgage rate, unless APRA determines otherwise. The calculator adds the entered buffer to the new rate to show an illustrative repayment at that higher rate.
A lender’s assessment also considers verified income, living expenses, existing commitments, credit limits, dependants, loan purpose and internal policy. A refinance that produces a lower contractual repayment can still fail a lender’s serviceability or credit requirements.
See APRA’s Credit Risk Management standard for the regulatory serviceability‑buffer requirement.
How to make a more useful refinancing comparison
First compare the new loan using a term close to the years remaining on the current mortgage. Then test a longer term separately if lower required repayments are important. This makes the cost of extending the debt visible.
Run several comparison periods based on how long you expect to keep the new loan. A household planning to sell in three years faces a different break‑even question from one expecting to retain the mortgage for another twenty years.
Finally, test a slightly higher new interest rate. A small pricing difference between application and settlement, or a later variable‑rate change, may alter a marginal result.
Use the Australian mortgage calculator for a detailed repayment and extra‑payment schedule. For additional borrowing and projected equity, use the Australian home equity calculator.
Australian home loan refinancing questions
Is the offer with the lowest monthly repayment always best
No. A lower repayment may result from a longer term or a different opening balance. Compare fees, repayments and the balance remaining at a common future date.
How can I find the real cost of leaving my fixed loan
Ask the current lender for a dated payout figure and a written break‑cost estimate. The amount can change with the loan balance, remaining fixed period and market conditions.
Why can financed switching costs be more expensive
Adding costs to the mortgage avoids paying them immediately but increases the balance on which interest is charged. Unless repaid early, those costs may remain in the loan for many years.
Can refinancing to a lower rate still increase total interest
Yes. Extending the loan term, increasing the balance or financing costs can outweigh some or all of the benefit from a lower rate.
Is cash released from home equity a refinancing saving
No. Cash out is additional borrowing received by the borrower. It increases the new mortgage and normally attracts interest until repaid.
Can I pay credit‑card debt through a mortgage refinance
A lender may permit debt consolidation, subject to its assessment. Compare the consolidated amount over a short, disciplined repayment period and understand that the home becomes security for that debt.
Will refinancing require another property valuation
The new lender will ordinarily need a value it accepts for the security property. It may use an automated, desktop or physical valuation, and the result may differ from an owner’s or agent’s estimate.