Cost of Refinancing Calculator

Plenty of home owners and investors find it worth their while to refinance. Lower interest rates mean lower monthly repayments, and over the course of a loan term this can be thousands of dollars in savings. However, refinancing is rarely cost-free, and often comes with extra expenses that you’ll need to keep in mind.

Home Loan Refinancing Cost Calculator

If you want to work out whether refinancing your mortgage is worth it, our home loan refinance calculator is a good place to start.

Once you enter the following information, you can get a rough idea of how much you’ll need to pay to get your new loan:

• Current property value

• Current loan balance

• Your state of residence

• Any fees your lender charges for leaving (discharge fees, settlement fees etc.)

• Any fees the new lender might charge when you join (valuation fees, legal fees, application fees etc.)

Mortgage refinancing costs

Lender refinancing costs

Fees differ from loan to loan, but here are the most common fees you might be expected to pay when refinancing:

• Application fee: Sometimes also known as an establishment fee, this is paid to the new lender for expenses incurred setting up the new home loan. This can cost up to $1,000

• Valuation fee: Some refinances will need a lender to appraise the value of your property before refinancing. This generally costs between $200 and $600

• Discharge fee: This is the fee paid to your old lender for discharging the mortgage early. It can range anywhere from $200 up to $1,000

• Break fee: If you’re on a fixed-rate loan, you might also need to pay a break fee for the loss to your lender. This can be thousands of dollars - potentially as high as $35,000

• Settlement fee: Anywhere from $100 to $600

• Exit fees (for loans taken out before July 2011): In July 2011, the National Credit Regulations prohibited early termination fees for residential loans, with some exceptions (including break fees). If you entered into your loan before July 2011, there’s a chance an exit fee still applies.

Mortgage registration fees

All states and territories charge a fee for registering a mortgage on the public record.

*Correct as of February 13 2024

Is refinancing your mortgage worth it?

Savings

The main reason borrowers refinance tends to be to take advantage of a lower interest rate elsewhere. Even small reductions to the interest rate you’re paying can mean major savings on your monthly repayments, which extrapolated over a full loan term can be hugely significant.

Imagine a borrower who owes $400,000, with 20 years remaining on their loan term, currently paying 6% p.a in interest. Below is how much they could save from refinancing to other loans with lower rates (data from the Savings refinancing calculator).

Once you work out how much you will be saving each month, you can compare this to the upfront cost of refinancing, as calculated above. You can work out how long it will take making repayments at the lower rate until you have fully recouped these costs, which can inform your decision.

Introductory rates and offers

Lenders often have special offers and rates to attract refinancing customers. For a long time, one of the most common was cashback, where lenders would give borrowers a cash bonus in return for their business. At ANZ for example, customers who refinance a home loan of $250,000 or more (with an LVR below 80%) can receive $2,000 in cashback. This can go towards the loan or be given in cash.

Many lenders scrapped cashback offers in 2023, including CommBank, Westpac and NAB, with shareholders concerned about profit margins. However there are several offers that are still valid as of February '24. Some lenders also offer an introductory rate, which is a temporary lower rate that applies to the initial period after refinancing.

Read more: Current cashback offers and deals in Australia

Other considerations

In some cases, there might be other reasons beyond repayments to prefer one lender over another. For example, you might do all your personal banking with the same bank, so could be happy to pay a bit extra for the convenience of using one institution for everything. Other borrowers might decide on (or against) refinancing because they prefer the customer service at another lender.

See more: Pros and Cons of refinancing your mortgage