“On a $600,000 loan, a 0.4% reduction saves $2,400 annually. Most unreviewed loans have a gap at least that wide.”
The saving from refinancing depends on your current rate, the rate available to you, your loan balance, and your remaining term. But in 2026, after three rate rises and with significant lender competition for new business, the savings available are at the higher end of what has been historically typical.
The calculation framework
Annual saving = (current rate minus new rate) multiplied by loan balance. A 0.3% reduction on $500,000 saves $1,500 per year. A 0.5% reduction on $700,000 saves $3,500 per year. These are straightforward interest calculations — not estimates. Your specific numbers produce a specific answer.
Typical savings for 2026 refinancers
Borrowers moving from a major bank standard variable rate of 6.5% to a competitive non-major variable rate of 6.0% save 0.5%. On $600,000, that is $3,000 per year, or $250 per month. Switching costs for a standard variable refinance run $800–$1,500. Break-even is typically 4–7 months.
The offset account factor
If your current loan has an offset account and the new loan doesn’t, the headline rate saving may be partially offset by the loss of the offset benefit. A borrower holding $40,000 in offset at 6.5% is saving $2,600 per year on that offset balance alone. Moving to a 6.0% loan without offset actually saves only $400 per year net. This calculation is worth doing before comparing headline rates.
What a broker comparison gives you
A rate comparison run by a broker across the full panel produces a concrete saving figure specific to your loan and profile. This removes the need to estimate — you get an actual number based on real current rates and your specific circumstances before committing to any application.
→ You may wish to speak with a licensed mortgage broker to assess your personal circumstances. This is general information only. Individual circumstances vary and scheme details change regularly. Verify current eligibility, caps, and terms with official sources before making decisions. Speak with a licensed mortgage broker for advice tailored to your situation. All loans are subject to lender approval.
Sources: ASIC MoneySmart, Refinancing Your Home Loan 2025; National Consumer Credit Protection Act 2009 (comparison rate requirements); RBA, Housing Finance Data 2025.
