Refinance break-even calculator — how to use it (Australia 2026)

Canonical tool: This article supports the Refinance playground.

Most refinance calculators show a lower monthly repayment and stop there. Australian borrowers need break-even on switching costs priced term-for-term — otherwise the maths looks better than your wallet after discharge fees and a silent 30-year reset.

This guide explains how to use the refinance hub without treating calculator output as a loan quote.

Step 1 — Enter your real loan position

Start with:

• Current balance (from your app — not original loan size)
• Current rate (your actual rate — not the advertised new-customer rate)
• Remaining term (years left on your P&I schedule)
• New rate (term-for-term quote from broker or lender — illustrative until confirmed)

If you only have a reset-to-30-years quote, ask again for dollar-for-dollar pricing before trusting break-even.

Step 2 — Add switching costs honestly

Typical items:

Use the switching costs checklist for a fuller list. The playground cost slider snaps near whole-month break-even for easier modelling — adjust manually if your file differs.

Step 3 — Read break-even, not just monthly saving

Break-even months = switching costs ÷ term-for-term monthly saving

Example: $3,500 costs and $193/month saving ≈ 19 months in modelled maths on a $580,000 loan at 6.45% → 5.89%.

If you might sell, fix again, or need to refinance within that window, external switching may not pay back — retention might.

Step 4 — Stack the term reset trap check

A lower monthly repayment from resetting to 30 years can add $150k–$200k+ lifetime interest on typical balances. The playground shows term-for-term saving beside reset trap cost so you do not confuse payment comfort with total interest.

Read the dedicated term reset trap guide and fake savings calculator article if you only remember one thing from this page: compare total interest.

Step 5 — Compare retention before you discharge

Call your lender for a retention discount on your remaining term. If it matches external pricing net of discharge, staying can win. See home loan loyalty tax and five signs you should refinance.

Step 6 — Email your PDF plan

Once numbers look meaningful, use the playground to email your refinance plan PDF — break-even, trap cost, and loyalty band in one summary.

General information only — not personal credit advice. Confirm rates, fees, and term-for-term pricing in writing before you sign.

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