Mortgage Term Reset Cost Calculator
See what it really costs to refinance onto a fresh 30-year term: the repayment drop, the years added, the extra total interest, and what happens if you keep paying your current repayment instead.
Last verified: 12 September 2026Reviewed by the Savings Mate editorial team — figures fact-checked against the ATO, Services Australia and ASIC MoneySmart.
Will resetting my home loan to 30 years cost me more?
Usually, yes. Refinancing $480,000 from 6.40% with 22 years left to 5.90% over a fresh 30-year term drops the repayment by about $546 a month, but adds $130,336 to the total cost (interest plus $1,200 in fees) because interest keeps running for eight more years. Keep paying your old repayment at the new rate and the loan clears 21 months sooner instead. Estimate only.
How this is calculated
Each scenario uses the standard level-repayment formula: monthly repayment = balance × r × (1 + r)n ÷ ((1 + r)n − 1), where r is the annual rate divided by 12 and n is the number of months. The loan is then amortised month by month — interest = balance × r, and the rest of the repayment reduces the balance — until it reaches zero.
Stay runs the current balance at the current rate over the remaining term. Reset the term runs it at the new rate over the new term, with refinance costs (net of any cashback) added to the total cost rather than to the loan. Keep repayment uses the new rate but pays the higher of your current repayment and the new loan's minimum until the balance is cleared. The headline figure is (reset-term interest + costs) − stay interest; a negative result means the rate cut outweighs the longer term. The keep-repayment break-even is the month in which the interest saved against staying first covers the costs.
Assumptions: monthly repayments and compounding, rates unchanged for the whole term, no ongoing fees, offset or redraw, and no Lenders Mortgage Insurance.
Sources: ASIC MoneySmart — Switching home loans and Mortgage calculator — checked 12 Sep 2026.
What to do next. Read why lower refinance repayments can mean more total interest for the mechanics, then run the refinance calculator to compare the two rates on the same remaining term, and the extra repayment calculator to see how much sooner a higher repayment clears the new loan.
General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.
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