What does switching your mortgage mean?
Mortgage switching, usually called refinancing, means replacing your current home loan with a new loan. The new loan may be with another lender or, in some cases, involve changing your product or rate with your existing lender.
How does this calculator estimate refinance savings?
The calculator compares the principal-and-interest repayment on your remaining balance at your current rate and remaining term with the repayment at the proposed new rate and term. It then adds annual loan fees and one-off switching costs.
What costs can apply when refinancing?
Potential refinancing costs can include your existing lender's discharge fee, fixed-rate break costs, new lender establishment charges, valuation or settlement costs and registration fees. The exact amounts vary by lender, state and loan structure.
Why should you compare the loan term carefully?
Starting a new 30-year loan when you only have 20 years remaining can reduce the monthly repayment even if the interest rate does not improve much. But paying the balance over a longer period can increase total interest.
For a cleaner comparison, start by entering the same term as your current remaining term. Then test a different term separately if you want to see the cash-flow trade-off.
Mortgage switching FAQs
What is the break-even period?
It is the estimated time required for ongoing monthly savings to recover the net one-off cost of switching. If the new mortgage does not produce a monthly saving, a meaningful break-even period may not exist under the assumptions entered.
Should I include a refinance cashback?
Only include a cashback or rebate if you reasonably expect to qualify and understand its conditions. A cashback can reduce the modeled switching cost but should not be considered in isolation from the loan rate, fees and features.
Does this calculator include fixed-loan break costs automatically?
No. Break costs depend on your existing fixed-rate contract and market conditions. If your lender provides a break-cost quote, enter it in the switching costs section.
Can refinancing increase my total interest even when repayments fall?
Yes. Extending the loan term can reduce monthly repayments but may increase the length of time interest is charged. Compare both repayments and total future costs.