See how much you could save by refinancing one or more loans to a lower rate.
Most Australian borrowers save $200–$500 per month by refinancing to a lower rate — roughly $250–$300 per month for every 1% rate cut per $100,000 borrowed. As of May 2026, a typical owner-occupier refinancing a $500,000 loan from 7.0% to 5.88% saves about $370 per month (~$4,400 per year) and tens of thousands in interest over the loan term. With switching costs near $1,000, most borrowers break even in 2–4 months. Use the calculator below to model your own loans — owner-occupied and investment — in one place.
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About NIK Finance: NIK Finance is an Australian finance brokerage led by Amir Nikibin, a Licensed Finance Broker operating under Australian Credit Licence 384704 (Finsure Finance & Insurance Pty Ltd). We compare 130+ lenders to help borrowers refinance home and investment loans. Meet the broker.
Most Australians save $200–$500 per month by refinancing to a lower rate. The exact figure depends on your loan size, the size of the rate cut, and your remaining term. As a rule of thumb, each 1% reduction in interest rate saves approximately $250–$300 per month for every $100,000 you owe.
For example, refinancing a $500,000 loan from 7.0% to 6.0% saves roughly $1,250–$1,500 per month — about $15,000–$18,000 per year and $200,000+ in interest across a 25-year term. Even a modest 0.5% cut on a $400,000 loan saves around $580 per month. Use the refinance calculator above for an exact figure, then check your borrowing power and new repayments.
The table below shows approximate monthly savings on a 25-year principal-and-interest loan. Figures are indicative (May 2026) and exclude switching costs.
| Loan size | 0.5% rate cut | 1.0% rate cut | 1.5% rate cut |
|---|---|---|---|
| $300,000 | ~$90/mo (~$1,080/yr) | ~$185/mo (~$2,220/yr) | ~$280/mo (~$3,360/yr) |
| $500,000 | ~$155/mo (~$1,860/yr) | ~$310/mo (~$3,720/yr) | ~$465/mo (~$5,580/yr) |
| $750,000 | ~$230/mo (~$2,760/yr) | ~$465/mo (~$5,580/yr) | ~$700/mo (~$8,400/yr) |
| $1,000,000 | ~$310/mo (~$3,720/yr) | ~$620/mo (~$7,440/yr) | ~$930/mo (~$11,160/yr) |
Source: NIK Finance calculations, May 2026. Assumes 25-year P&I term; actual savings vary with term and fees. Learn more about the comparison rate.
Straightforward refinances usually cost $500–$2,500 in Australia. Typical line items: a discharge fee from your current lender ($150–$400), a new loan application/settlement fee ($0–$600, often waived), and a valuation fee ($200–$600). If you borrow above 80% LVR you may also pay LMI ($2,000–$20,000+).
A break fee applies only to fixed-rate loans exited early. It can be zero if rates have risen, or tens of thousands if rates have fallen. Variable loans don’t have break fees. This calculator excludes break fees — always request an estimate from your lender first. See our glossary on break costs and early exit fees.
Often, yes. As of May 2026 some lenders offer $2,000–$4,000 refinance cashback, which can fully offset switching costs. A broker can tell you which current offers you qualify for across 130+ lenders.
Refinance when you can drop your rate by at least 0.5–1%, or when your fixed term is ending. Other strong triggers: your property value has risen (lowering your LVR), your income or credit has improved, or you want offset account features or to consolidate debt.
If you save $500/month and switching costs are $1,000, you break even in 2 months. Beyond that point, the savings are yours. If you plan to keep the property for years, refinancing almost always makes sense.
Yes — investment loans are often priced 0.10–0.30% above owner-occupier loans, so the savings can be just as large. This calculator lets you model owner-occupied and investment loans together. Read more in our guide to refinancing and saving thousands or compare home loan options.
The calculator compares your current repayment against a new repayment at a lower rate, then shows monthly savings, annual savings, total interest saved and break-even months. Enter each loan’s balance, current rate, current monthly repayment, years remaining, and property type. Owner-occupied loans default to a 5.88% suggested rate and investment loans to 5.98% — both editable.
Yes. Use “Add Another Loan” to model owner-occupied and investment loans together. The calculator shows per-loan savings plus a combined total and a bar chart comparison.
Switching costs are fixed at $1,000 and break fees are excluded. Interest saved is calculated over your remaining term using the repayment you enter, which keeps the estimate conservative and accurate.
As of May 2026, competitive owner-occupier variable rates commonly sit around 5.8%–6.3%, with investment rates roughly 0.10–0.30% higher. Your actual rate depends on your LVR, debt-to-income ratio, credit history and loan size.
A “good” owner-occupier rate in May 2026 is generally at or below ~5.9% for borrowers under 80% LVR with clean credit. If your current rate starts with a 6 or 7, you are likely overpaying.
Lower your LVR (below 80% removes LMI), keep credit clean, and let a broker negotiate across 130+ lenders. Check your Financial Power Score or estimate other property costs first.
Content last reviewed: 17 May 2026. Rates are indicative only and change frequently — confirm current rates before acting. This is general information, not credit advice.
Refinancing replaces your current loan with a new one at a lower rate or with better features. In Australia’s competitive market, lenders offer their sharpest rates to new customers while existing borrowers drift onto a “loyalty tax”. Refinancing lets you reclaim those savings.
The main driver is a lower interest rate. On a $500,000 loan, dropping from 7% to 6.5% saves roughly $650 per month (~$7,800 per year, ~$200,000 over 25 years). Other reasons: accessing equity, consolidating debt, or switching from interest-only to principal and interest.
The key metric is the break-even period. If you save $500/month and costs are $1,500, you break even in 3 months. Keeping the property beyond that makes refinancing worthwhile.
Watch fixed-rate break fees. Exiting a fixed loan early when rates have fallen can cost $10,000–$30,000+. Variable loans rarely have exit fees beyond a $150–$400 discharge fee. Many borrowers refinance when the fixed period ends to avoid this.
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