Mortgage broker tools · Refinance
Refinance savings calculator: net 3-year saving after every fee
Calculator factors discharge fee, establishment fee, legal, valuation, mortgage registration, break costs (if applicable), and cashback offers. Outputs monthly saving, breakeven months, and 3-year net saving — the practical decision metric.
★Key takeaways
- ✓On a $500k loan, a 0.5% rate drop saves ~$150/month and ~$45,000 over 25 years. Refinance breakeven is typically 6-12 months — often immediate with a $3k cashback.
- ✓Standard refinance costs $850-$1,800 (variable loans). Fixed-loan break costs can run $5,000-$30,000+ and often kill the saving — get a written quote BEFORE applying.
- ✓Cashback offers ($2k-$4k) are still common in April 2026 but reduced from the 2022-2023 peak. Some non-banks dropped cashback in favour of lower rates.
- ✓Keep the same repayment after refinancing — let the loan pay down faster. A $500k loan dropping 6.0% to 5.5% at unchanged repayment finishes ~3 years early and saves ~$70k.
- ✓Brokers run refinance comparisons across 30+ lenders simultaneously and often negotiate rates 0.10-0.40% below advertised. Use the calculator below as the conversation starter, not the final answer.
Calculator
Compare your current loan to a refinance
Current loan
Get a written quote from your current lender before relying on this. Indicative formula: balance × (your fixed rate - current matching fixed rate) × remaining fixed years.
New loan
Monthly saving
$165
Reduction in repayment
Total refinance costs
$950
Fees minus cashback
Breakeven
6 mo
Months to recover costs
3-year net saving
$4,990
After all costs
Refinance likely worthwhile
Breakeven within 12 months and positive 3-year net saving. Confirm exact rates + cashback eligibility with broker before proceeding.
Cost breakdown reference
Typical AU refinance costs (April 2026)
| Cost | Typical range | Notes |
|---|---|---|
| Discharge fee (old lender) | $320 – $390 | Set by old lender, usually around $350. Some lenders charge less for online discharge requests. |
| Establishment fee (new lender) | $0 – $795 | Frequently waived in 2026 as a refinance incentive. Always ask broker to negotiate to $0. |
| Settlement and legal | $300 – $600 | PEXA + solicitor or conveyancer. Some new lenders include this in their refinance package. |
| Property valuation | $0 – $300 | Usually free on refinance for owner-occupiers below 80% LVR. Investor and high-LVR refinances may pay. |
| Mortgage registration / transfer | $160 – $300 | State Land Titles Office charge. Set by each state revenue office. |
| Break cost (fixed loans) | $1,000 – $30,000+ | Highest single cost. Always get written quote BEFORE applying. Formula: balance × rate differential × remaining years. |
| Cashback offer (new lender) | −$2,000 to −$4,000 | Reduced from 2022-2023 peak. Some non-banks dropped cashback for lower rate instead. |
Typical net cost for a variable-loan refinance after cashback: −$2,000 to +$1,500 (often profitable on day one). Fixed-loan refinances vary wildly depending on break cost.
When to refinance
Practical triggers
Rate gap of 0.25%+ to a competitive lender
On a $500k loan, 0.25% saves $75/month and $22k over 25 years. Easily covers refinance costs with cashback.
Your fixed term is ending in < 60 days
Lender will roll you to standard variable, typically 0.5-1.0% above market. Engage broker 4-6 weeks before expiry.
You have built 20%+ equity
Drops you under 80% LVR — access to lowest tier rates and no new LMI.
You want to consolidate debt
Credit card / personal loan / car loan rates of 10-22% rolled into home loan at 6%. Lower interest cost — but extend term and discipline matters.
You want to access equity
Renovation, investment deposit, business capital. Most lenders allow up to 80% LVR cash-out without further questions.
Current lender refuses to discount
Always ask current lender for a "loyalty discount" first. If they refuse, refinancing forces a competitive answer or you leave.
Common questions
Refinancing — common questions
How much can refinancing actually save me?
On a $500,000 loan with 25 years remaining, dropping your rate by 0.5% saves about $150/month and $45,000 over the remaining term. After fees of ~$1,000-$2,500, breakeven is typically 6-12 months. With a $3,000 cashback from the new lender, breakeven often happens in month 1. Bigger savings on bigger loans — $1m loan dropping 0.5% saves $300/month.
What is the typical cost of refinancing?
Standard refinance on a variable loan: $850-$1,800 in fees ($350 discharge + $0-$795 establishment + $300-$600 legal + $0-$300 valuation + $160-$300 mortgage registration). With a $2,000-$4,000 cashback from the new lender, refinancing is often free or profitable on day one. The big variable is BREAK COSTS on fixed loans — these can run $5,000-$30,000+ and easily kill the saving.
Are mortgage cashback offers still common in 2026?
Yes but reduced from the 2022-2023 peak. Many lenders offer $2,000-$4,000 cashback for refinance (loan size minimums typically $250k-$500k). A few non-banks have stopped cashback in favour of slightly lower rates — sometimes a better economic outcome over 3+ years. Brokers can match you to the lender offering the best combined rate + cashback for your specific loan size and LVR.
How long does refinancing take?
Typical timeline: 3-6 weeks from application to settlement. Online lenders can be faster (2-3 weeks); big banks slower (6-8 weeks during busy periods). Process: application + documents (week 1), valuation + credit assessment (week 2-3), conditional approval (week 3), unconditional approval (week 4), settlement coordination with old lender (week 4-6). Your old loan continues until settlement — no missed payments.
Can I refinance if I have less than 20% equity?
Yes but you may pay new LMI. Some lenders waive LMI on refinance if your loan-to-value is within their LMI grid AND you have a clean repayment history. LMI charged on refinance is rare under 90% LVR with major lenders. For high-LVR refinance, the LMI cost (potentially $10-20k) usually outweighs the rate saving — wait until you have built more equity.
Should I refinance to lower repayments or stay at the same repayment and pay down faster?
Almost always: keep the same repayment, let the loan pay down faster. A $500k loan refinanced from 6.0% to 5.5% with the same $2,997/month repayment finishes ~3 years earlier and saves ~$70k in interest. Lowering the repayment instead saves $150/month in cash flow but keeps the loan running full term. Cash flow matters in some situations (income drop, parental leave) — but otherwise, faster payoff wins.
What credit checks happen when I refinance?
A full credit assessment, similar to applying for a new loan. The new lender pulls your credit file (multiple hard checks within 6 months can lower your score), verifies income (recent payslips, tax returns), checks expenses (3 months of bank statements), and runs a serviceability calculation. Refinance is generally easier than a new purchase — you have a track record on the existing loan. Multiple recent credit applications can be a flag.
Is it worth refinancing if my fixed term expires in 6 months?
Wait if break costs would exceed the 6-month saving. Quick rule: estimate break cost = balance × (your fixed rate - current 6-month bank bill rate) × 0.5. If that exceeds 6 × monthly saving, wait. Otherwise, refinance early — the rate saving plus a likely $3k cashback can outweigh modest break costs. Ask the lender for a written break cost quote before deciding.