Is it worth refinancing my home loan?

Refinancing is usually worth it when the saving from a lower rate recovers your switching costs well within the loan term — a common rule of thumb is a break-even under about two years. Even a 0.5% lower rate on a $500,000 loan saves roughly $150-$170 a month. Weigh that against discharge fees, new loan fees, and the possibility of paying Lenders Mortgage Insurance again if your equity is below 20%. Use the calculator above to see your monthly saving, break-even point, and net saving over the remaining term.

What costs are involved in refinancing?

Typical costs are a discharge fee from your current lender (often $150-$400), an application, valuation or settlement fee from the new lender (sometimes waived in cashback deals), a government mortgage registration fee, and — if your loan is more than 80% of the property value — Lenders Mortgage Insurance, which can run into thousands. Many lenders offer cashback or fee waivers to win refinancers, so always ask what they will cover.

Does refinancing reset my loan term?

It can. If you refinance a loan with 25 years left back to a fresh 30-year term, your repayments drop further but you pay interest for longer, which can increase the total interest even at a lower rate. To compare fairly, keep the same remaining term (as this calculator does) or keep your repayment the same and let the lower rate shorten the loan.

Refinance Calculator

See whether refinancing your home loan is worth it. Enter your current loan and the new rate to get your monthly saving, the months to recover switching costs, and your net saving over the remaining term.

Last verified: 5 May 2026

Is refinancing my mortgage actually worth it?

It is worth it when the monthly saving recovers your switching costs quickly — generally a break-even under ~2 years. Even 0.5% off a $500,000 loan saves roughly $150-$170/month. Watch for the discharge fee, new loan fees, and Lenders Mortgage Insurance again if your equity is under 20%. Source: ASIC MoneySmart.

Worked example. $500,000 with 25 years left, dropping from 6.5% to 5.9%, with $800 in switching costs: repayments fall about $190/month, switching costs are recovered in roughly 4 months, and the net saving over the remaining term is around $56,000.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

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Is refinancing my mortgage actually worth it?

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