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Refinance Calculator for Home Loans
Refinance Calculator for Home Loans
Written by
Tina Sendin
Edited by
Ellie Garran
Reviewed by
Sam HymanCompare home loans the easy way
We partnered with Aussie to help you compare home loans from over 25 lenders and over 2,500 home loan products.
Long story short
The refinance calculator can give you an idea of potential savings
It shows how much you could save on repayments, interest, and time.
Refinancing can lead to big savings on your home loan
Switching lenders could lower your repayments by hundreds monthly, save you thousands in the long run, and shave years off your loan term, depending on the new loan structure.
Other perks include accessing equity and consolidating debt
Refinancing isn’t just about rates; it can simplify your debts or fund renovations.
Refinancing costs can add up
It’s worth weighing these against potential savings.
How do I use the refinance calculator for my home loan?
While it’s not rocket science, our home loan refinance calculator will require a handful of details:
Loan type
Are you living in your property (owner occupier) or renting it out (investment)?
Loan amount remaining
Punch in the amount you still owe (not the original loan amount). You can also use the slider to select your remaining home loan balance.
Time remaining
How many more years do you need to pay off your home loan? Whether it’s 25 or 10 (homestretch!), this bit helps calculate long-term savings and the years you can cut by refinancing.
Current interest rate
Grab your latest loan statement or check your mobile banking app for the current interest rate – not the rate you signed up for years ago.
Then, it’s time to channel your inner Jerry Maguire and holler, ‘Show me the money!’
When you hit the ‘Show me’ button, you’ll instantly see not just the money but also the time you’ll potentially save with refinancing. Specifically, the refinance calculator shows:
- how much smaller your repayments could be (in annual and monthly amounts)
- the total interest you could save with extra repayments over the life of the loan
- how many years refinancing could shave off your loan term.
Also, don’t forget that we also have other home loan calculators you can use to help you in your refinancing journey – borrowing power and extra repayment calculators! There’s also the principal and interest calculator, which shows how you can potentially pay off your loan faster by switching repayment types (principal and interest or interest only) and repayment frequency.
How do I calculate whether it’s worth refinancing my home loan?
Before you go hell for leather on refinancing and click that ‘switch now’ button, take a breath and touch grass. You might find that the grass isn’t always greener. Here’s a breakdown of what you might want to look into before you make the big call.
Compare your interest rate and repayments
The first and most obvious benefit of refinancing is a lower interest rate. Whether it’s due to changes in economic conditions or simply a better deal, finding a lender with a lower rate could be the key to saving money over the life of your home loan. Because interest rates fluctuate, it’s worth checking regularly to see whether your mortgage is still competitive. If your interest repayments are giving you the ick, it might be time to consider refinancing!
If your current lender’s not keen on giving you a better deal, shopping around actually makes sense. And if you score a lower rate, chances are your minimum repayments will drop too. Helloooo, savings! There are heaps of Aussie lenders out there, and you might be surprised at the better rates on offer. Even a tiny drop in your interest rate could save you tens of thousands over the years.
Consider your loan term
Refinancing often resets your loan term, unless you choose a shorter remaining term– especially if your current payments are more than comfortable.
Let’s look at this hypothetical scenario:
Ebru’s already knocked seven years off her 30-year mortgage – so would she really want to reset it to another 30 years? Sure, her monthly home loan repayments would drop, but she’d likely pay more interest in the long run.
On the other hand, shortening the loan term (say, from 23 years to 15) might mean higher monthly repayments. But she’d save a big chunk in total interest. And if her salary’s gone up in recent years, a shorter loan term could be a total win-win.
Review your loan structure
The structure that suited you when you took out the mortgage may no longer be the shiniest option. Refinancing is a good time to think about the pros and cons of switching to another structure.
Switching from fixed to variable
Variable-rate home loans fluctuate with the market and generally allow more flexibility for extra repayments. However, rates might increase more than your wallet can handle. Switching from fixed rate loan to variable, before the fixed rate period ends can also come with break costs.
Switching from variable to fixed
Fixed-rate mortgages lock in a rate. You’ll know exactly what you’ll pay each month, but you may miss out on savings if rates drop.
If you want the best of both worlds, you may want to look into split loans, where you can have part fixed, part variable interest rates. You can even dictate the portion to allocate for each!
Check your loan features
It’s not just about scoring a better rate – some loan features can save you thousands or simply make life easier.
- An offset account is a transaction account attached to your mortgage, and it can help you reduce the interest you’re paying on your home loans.
- A redraw facility can let you dip into extra repayments if you need cash. You might want to check your loan type, as this feature is more commonly offered with variable-rate home loans. You might occasionally find it with loans with a fixed-rate period, but with less flexible conditions.
- With flexible repayments, you can make lump sum payments and increase your repayment amount (or its frequency) when you want to.
Account for refinancing costs
There’s no point switching if the costs will only eat into your savings. Refinancing costs can apply to both your existing and your new mortgage. They can set you back a few hundred bucks, if not thousands all up.
- Break or exit fees: These pop up on fixed-rate home loans and are basically the cost of breaking up with your current lender. If at any time before the end of a fixed-rate term you switch to another loan product, loan interest rate (fixed or variable), or repayment type, then a break cost may apply. The price tag depends on your lender, outstanding loan amount, and how long you’ve had the loan – but it’s no pocket change. It could hit tens of thousands. Far out!
- Application or establishment fees: These are up-front payments when you sign up with a new lender, which can set you back up to $1,000.
- Discharge fees: Your old lender will charge admin fees to close your loan, usually around $150 to $500.
- Valuation fees: Your new lender will want to check your property’s value, which could cost $100 to $600. But this could also be waived.
- Lenders mortgage insurance (LMI): If your new loan is over 80% of your property’s value, you’ll cop LMI again. It’s about 1–3% of your loan amount (and varies by lender and LVR) and can run into thousands. Ouch.
- Admin fees: Your new loan might come with ongoing fees charged at the end of each repayment period – like a monthly admin fee of $5 to $15.
Consider other reasons to refinance
There are plenty of other reasons refinancing might make sense for you.
Got multiple debts hanging over your head? Refinancing can help roll them into one. Debt consolidation can sometimes help manage multiple repayments a little more easily (and can mean thinking of one due date).
Need funds for a reno, an investment, or a big-ticket purchase? Tapping into equity through refinancing could be the way to go.
Life changes – and your mortgage can, too. Whether you’ve got a new job, a growing family, or a shift in your financial situation, refinancing can help Aussies stay on top of their finances – no matter their stage in life.
Helpful tip
Too many Aussies park their mortgage with the same lender for years, even when rates drop or their needs change. It’s the classic ‘loyalty tax’ – money you pay purely by avoiding the switch. But with the cost-of-living pressure many of us have become familiar with, complacency can be expensive.
A refinance calculator shows you an estimate of how much you could save if you make the move. It’s quicker than calling your bank or lender (and let’s be honest, who enjoys those salesy calls anyway?). With unbiased numbers, it helps you decide if refinancing is the right move for you.
Sam Hyman
General Manager – National Sales, Aussie
How much can I save by refinancing my home loan?
Let’s have a look at how the refinance calculator works and how it can help you make decisions:
| Current home loan – 6.47% interest rate | New home loan – 6.00% interest rate | Savings | |
| Loan type | Basic variable no offset | ||
| Loan amount | $600,000 | ||
| Loan term remaining | 25 years | ||
| Estimated monthly repayments | $4,040 | $3,866 | $174 |
| Total interest payable over the life of the loan | $612,001 | $559,743 | $52,258 |
Source: Indicative numbers from iSelect mortgage calculator, December 2025
As you can see, in this scenario, refinancing reduces how much it costs to repay the principal and interest monthly, giving a five-digit savings over the life of the loan.
Frequently asked questions
Is refinancing worth it for a 1% lower interest rate?
Usually, yes. Even a 1% difference can have a massive impact, depending on your circumstances. For example, on a hypothetical $600,000 loan over 25 years, dropping from 6.47% to 5.47% could cut repayments by about $366 a month. In a year, that’s equivalent to $4,392 worth of difference! You can put that amount into your travel fund or as a lump sum extra repayment, if you want to cross the finish line sooner.
You can always use a refinance calculator to see the difference (and the seismic shift) when you score a lower interest rate.
Do I have to pay stamp duty if I refinance my home loan?
Stamp duty could still apply when you refinance a mortgage. This might be true if, for instance, you change ownership structure (like adding a partner to the loan) or if you get a new lender. To find out, you can check with either your conveyancer or your state’s government body to learn the rules around stamp duty. Here are some handy links for you containing state-based information on stamp duty:
Does refinancing my home loan affect my credit score?
It can. That’s because your new lender will run a credit check (a ‘hard’ enquiry) every time you apply for a new loan. If you fire off too many applications in a short time, your credit score could be impacted. So, it’s often a good idea to use online comparison tools to suss out your options first. Then, whenever you’re ready, you can finally apply for the home loan that tickles your wallet’s fancy.
What does the refinance process timeline look like?
The refinance process starts with an initial chat with your broker to discuss your goals and explore suitable loan options. Next, you compare lenders, ask questions, and gather the necessary documents. Once you’ve chosen a lender, your broker submits the application on your behalf. The lender then reviews your application (matching it against the lending criteria), conducts a valuation if required, and confirms your eligibility. Finally, your loan is approved, settlement is arranged, and you begin making repayments under your new loan.
Where can I refinance my home loan?
A refinance calculator can hand you the numbers you need to make a call. If you think you’ll find a decent saving by refinancing, you can start comparing home loan offers from a stack of lenders.
iSelect has partnered with Aussie Home Loans to make this process a whole lot easier. Start a comparison of home loans from a range of lenders online in just a few clicks.
Get started on comparing home loans today!
Find a home loan by comparing with iSelect’s trusted partner, Aussie.
iSelect is the trading name of iSelect Mortgages Pty Ltd (ABN 86 148 217 181). iSelect Mortgages Pty Ltd is a credit representative (Credit Representative 400540) of Lendi Group Distribution Pty Ltd (Australian Credit Licence 246786). iSelect provides a referral to Lendi Group Pty Ltd, a Credit Representative of Lendi Group Distribution Pty Ltd (Australian Credit License 246786). iSelect Mortgages Pty Ltd receives a commission from Lendi Group Distribution Pty Ltd, the licensee for each new customer account created and for each home loan submitted through this service.