Refinancing in 2025: Is It Worth Switching Lenders?

With cash rate expectations shifting, many borrowers are asking whether a refinance in 2025 makes sense. The simple test: does your monthly saving beat the switching costs in a reasonable time? Use the tool below to see your monthly saving and break-even instantly.

Quick refinance calculator

Enter your loan, remaining term, current rate, the new rate you’re offered, and any switching costs. Results update automatically.

Loan amount ($):

Years remaining:

Current rate (% p.a.):

New rate (% p.a.):

Switching costs ($):

Two quick scenarios

These examples show how the numbers play out. Change the inputs above to match your situation.

Scenario A: Stay with your bank

• Loan: $500,000 · Years left: 25
• Current rate: 6.60% p.a.
• You keep paying your existing repayment (see table). No switching costs.

Scenario B: Refinance to a lower rate

• Loan: $500,000 · Years left: 25
• New rate: 6.10% p.a. (0.50% lower)
• Switching costs: $1,200 (discharge, application, valuation)
• Result: monthly repayment drops (see table). Break-even occurs when cumulative savings exceed $1,200.

Want to test more combinations? Use our full Repayment Estimator or see how rate moves change repayments in our RBA Rate Decisions guide.

When refinancing tends to work

• You’re on a “loyalty tax”: your rate crept up relative to new-customer rates.
• You have a solid repayment history and a loan-to-value ratio (LVR) at or below 80% (avoids LMI).
• The monthly saving covers switching costs within ~12–24 months.

When to think twice

• Fixed-rate break fees are high (check your terms if currently fixed).
• Your LVR is above 80% and switching triggers lenders mortgage insurance.
• You plan to sell or restructure the loan soon (not enough time to reach break-even).