“On a $600,000 loan, a 0.4% rate reduction saves approximately $2,400 per year. Whether that is worth the switch depends on your specific numbers, not the headline saving alone.” [cite: 262]
The saving from refinancing depends on three things: your outstanding loan balance, the rate difference between your current loan and the best available option, and how many years remain on your loan. [cite: 263] The larger the balance and the rate gap, the faster the saving compounds. [cite: 264]
Indicative savings at different loan sizes
These are illustrative examples only. Actual savings depend on your specific loan, rate, and fees. [cite: 266]
- On a $400,000 loan with a 0.4% rate saving, the indicative saving is approximately $1,600 per year. [cite: 267]
- On a $600,000 loan with a 0.4% rate saving, approximately $2,400 per year. [cite: 268]
- On an $800,000 loan with a 0.3% rate saving, approximately $2,400 per year. [cite: 269]
The loyalty premium
Banks often price new customer rates 0.2 to 0.5% below the rates they offer existing customers who do not ask. [cite: 271] Calling your current lender and asking them to match a competitor rate is a legitimate first step, and it sometimes resolves the gap without switching at all. [cite: 272]
What to calculate before deciding
Work out your total switching costs (discharge fees, registration fees, application fees). [cite: 274] Then calculate your monthly interest saving at the new rate. [cite: 275] Divide total costs by monthly saving to find the break-even in months. [cite: 276] If break-even is under 12 months and you plan to hold the loan for several more years, the refinance typically makes clear financial sense. [cite: 277]
You may consider seeking independent advice from a licensed mortgage broker or financial professional to assess your personal circumstances. [cite: 278] These are illustrative examples only and will vary depending on loan size, rate, and individual fees. [cite: 279] This information is general in nature and does not take into account your objectives, financial situation or needs. [cite: 280] Speak with a licensed mortgage broker for figures specific to your loan. All loans are subject to lender approval. [cite: 281]
Sources: ASIC MoneySmart, Comparison Rates and Fees 2025; RBA, Housing Finance Statistics 2025; Navigate Financial Wealth, Refinancing Home Loan 2026; [cite: 282] MFAA Industry Intelligence Report 2025. [cite: 283]
