Refinancing is worth doing when the saving beats the cost quickly enough. The difficulty is that the costs are scattered across three parties and none of them appear in a rate comparison.
Use this list to total your own switching cost, then divide it by your monthly saving to get the break-even in months.
| Cost | Charged by | When it applies |
|---|---|---|
| Discharge or settlement fee | Outgoing lender | Almost always |
| Fixed rate break cost | Outgoing lender | Only inside a fixed term |
| Application or establishment fee | New lender | Often waived competitively |
| Valuation fee | New lender | Frequently absorbed by the lender |
| Mortgage registration and discharge | NSW Land Registry Services | Always |
| Lenders mortgage insurance | New lender’s insurer | Only if the new loan exceeds eighty per cent of value |
| Ongoing or package fee | New lender | Annually, if the loan carries one |
The insurance row is the one that quietly ends refinances. A premium already paid to your current lender is not transferable, so if your equity has not grown past twenty per cent you may pay it twice.
A break cost is not a fee in the ordinary sense. It is a calculation based on how wholesale rates have moved since you fixed, and it changes daily.
ASIC covers the same ground independently at Moneysmart, switching home loans.
Three numbers, not a spreadsheet. Total your costs, work out the monthly saving, divide one by the other.
One correction most people miss. Compare the new loan over your remaining term, not over a fresh thirty years. Restarting the term lowers the repayment by stretching the loan, which looks like a saving and is not one.
Use the refinance savings calculator, and read whether refinancing is worth it and whether cashback offers stack up.
Usually between $500 and $1,500 where no fixed rate is involved, made up of a discharge fee, government registration charges and sometimes an application or valuation fee. Breaking a fixed rate can add thousands depending on wholesale rate movement. If the new loan would exceed eighty per cent of the property value, mortgage insurance may also apply again.
Rarely, because it is charged by the lender you are leaving and is usually set out in your original loan contract. It is generally a modest amount compared with the saving a refinance achieves. The larger variable is whether you are inside a fixed term, since a break cost can be many times the discharge fee.
Yes, because it costs nothing and frequently works. Lenders price new business more sharply than existing business, and a retention team can often close part of that gap when asked. If they match the market you have saved yourself six weeks of paperwork, and if they will not you have a concrete figure to compare against.
Not usually. A cashback is a one-off payment, while the interest rate applies for the life of the loan, so a slightly higher rate can outweigh the cashback within a couple of years. Work out the total cost over three to five years including the cashback rather than treating the payment as the deciding factor.
Total the costs, divide by the monthly saving, and decide on that number rather than on the rate difference.
Read more about refinancing or releasing equity at the same time, or read the documents you will need.
Ask us to run your break-even.
Paritosh Wadhwani | Director and Principal Broker, APW Finance
Member of the Finance Brokers Association of Australia (FBAA). Arranging residential, commercial and specialist lending for Sydney clients across a panel of more than 50 lenders.
APW Finance Pty Ltd, 304/20a Lexington Drive, Bella Vista NSW 2153. Email: info@apwfinance.com. Phone: +61 447 959 546.
ACN 620 646 479 | ABN 79 620 646 479
This guide is general information only. It does not take into account your objectives, financial situation or needs, and it is not financial or credit advice. Lending criteria, interest rates, duty thresholds and government schemes change, and every application is subject to lender approval. Consider whether this information suits your circumstances and seek independent advice before acting. Figures quoted are current at the date below and should be confirmed before you rely on them. Last reviewed: October 2026.
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