How much can I save by refinancing a $500,000 home loan?

Dropping from 6.50% to 5.80% over 25 years may save around $75–$150 per month in repayments and several thousand in interest over the term, before fees. Actual results vary.

What are typical refinance costs in Australia?

Common costs include discharge fee ($150–$400), government mortgage registration ($120–$250 per title), application fee ($0–$600), valuation ($0–$400), settlement or legal ($0–$400), and fixed-rate break costs if applicable.

Do I pay LMI again when refinancing in Australia?

If your new loan exceeds 80% LVR, lenders mortgage insurance (LMI) may apply. If your LVR is 80% or less, LMI is usually not required.

Will refinancing affect my credit score?

Yes, applications create inquiries on your credit report. A single well-managed refinance has a minor, temporary impact for most borrowers.

How long does refinancing take in Australia?

Most refinances settle within 2–6 weeks depending on lender queues, valuations, and document readiness.

Are refinance interest costs tax deductible in Australia?

For investment loans, interest is generally deductible. For owner-occupied homes, interest is not deductible. Check ATO guidance or a tax professional.

Can I refinance with bad credit or unstable income?

Specialist lenders may consider it at higher rates and stricter conditions. Compare the cost carefully and seek advice.

2025 Home Loan Refinance Calculator Australia: Save $3,000+ in Interest (호주 홈론 재융자 계산기 2025)

Australia 2025

Home loan

Refinance

2025 Home Loan Refinance Calculator Australia: Save $3,000+ in Interest

Q: Is refinancing worth it in Australia 2025?

If the new rate is meaningfully lower and fees are recovered within 2–3 years, refinancing can reduce total interest. Use a calculator to check savings and break-even.

(호주 홈론 재융자 계산기 2025: 이자 300만 원 절약법)

TL;DR Summary

Refinancing can cut total interest and reduce monthly repayments if the rate drops enough.
The calculator below estimates savings, break-even time, and new repayments.
Compare at least 3–5 lenders and request a rate match from your current bank.
Check all costs: discharge fee, application fee, valuation, state registry fees, and possible fixed-rate break costs.
Consider features you need (offset, redraw, split, fixed vs variable) before switching.

Refinance Savings Calculator (Australia)

Optional: Show LVR helper (for LMI check)

Estimated property value ($)

Cash-out amount added ($)

If LVR > 80%, LMI may apply with many lenders.

Assumptions: Principal & interest, monthly repayments, constant rates for illustration. Results are estimates only.

Concept Overview — why this matters in Australia

With higher rates in recent years, even a 0.30–0.70 percentage point drop can translate into thousands in lifetime interest savings. A clear calculation helps decide if switching is worth the effort and fees.

Comparison Table

Feature	Stay with current lender	Refinance to new lender
Rate change	Ask for a “rate review”. Often small discount.	Potentially larger drop if you qualify.
Costs	Usually none.	Discharge, application, valuation, registry. Break costs if fixed.
Features	No change to offset/redraw.	Chance to add offset, split, extra repayments.
Time & admin	Fast (days).	2–6 weeks incl. valuation & settlement.
Risk	Minimal change.	Credit check, LVR/LMI risk, possible delays.
Best for	Bargain a sharper rate without moving.	Chase bigger savings or better features.

Who each option is best for

Stay and negotiate: You’re time-poor, LVR > 80%, or fixed-term break costs are high.
Refinance to variable: You want flexibility, offset, and the sharpest rate you can qualify for.
Refinance to fixed or split: You prefer certainty (fixed) but still want some flexibility (split).

Step-by-step: how to choose or apply

Pull your numbers: balance, remaining term, current rate, property value (for LVR).
Run the calculator: test 2–3 new rates and include all fees.
Request a rate match from your current bank. Keep written quotes as leverage.
Compare features: offset, redraw, extra repayments, annual/package fees.
Check LVR & LMI: if new LVR > 80%, add potential LMI into your cost comparison.
Submit application: ID, payslips, bank statements, home insurance, rates notice.
Valuation & approval: answer queries quickly to avoid delays.
Settlement: confirm old loan closure and new direct debit date.

Cost / Fees / Tax considerations

Bank & government fees: discharge ($150–$400), mortgage registration ($120–$250), application ($0–$600), valuation ($0–$400), settlement/legal ($0–$400).
Fixed-rate break costs: may apply if you exit a fixed loan early.
LMI: payable if new LVR > 80% (varies by lender and policy).
Tax: owner-occupied interest is not deductible; investment loan interest is generally deductible. Fees may have specific tax treatment — check ATO guidance.
Cashback & promos: treat as a once-off; don’t choose a higher ongoing rate just for a bonus.

FAQ

Is refinancing worth it in Australia 2025?

If you can drop the rate enough and recover fees within ~24–36 months, it’s usually worth considering. Use the calculator to confirm.

How much can I save refinancing a $500,000 home loan?

A 0.70% drop can mean ~$75–$150 less per month and several thousand in interest over time (illustrative only).

Do I need 20% equity to refinance?

No, but if your LVR exceeds 80% many lenders require LMI. Some have policies up to 90–95% with stricter rules.

What documents do I need to refinance?

ID, payslips (or BAS for self-employed), bank statements, rates notice, building insurance, and details of existing loan.

How long does a refinance take?

Typically 2–6 weeks depending on valuation timing and how quickly you provide documents.

Will refinancing hurt my credit score?

Applications create inquiries, which can slightly reduce your score temporarily. Managing the new loan well helps over time.

Do I pay stamp duty when refinancing in Australia?

Not for a standard refinance without a property transfer. State registry fees still apply.

Is cash-out refinance taxable?

The cash-out itself isn’t income, but interest deductibility depends on how the funds are used (investment vs private). Check ATO guidance.

Sources / Official references

ASIC Moneysmart — Home loans & refinancing: moneysmart.gov.au/home-loans
ATO — Deductions for investment properties: ato.gov.au
State/Territory Land Titles fees (mortgage registration/discharge): check your local Land Registry.
Your lender’s credit guide and key facts sheet for current fees and features.

Non-financial advice disclaimer

This article is for general information only and is not financial advice. Please check official government resources or a licensed financial adviser before making decisions.

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