Should you refinance — or call your bank first?
Most refinance calculators show you the rate saving and stop. This one shows what they leave out: cashback clawbacks (you pay it back if you switch again too soon), real switching costs of $1,200–$2,500, and the rate your current lender would need to drop to in order to match. That last one is usually a free phone call.
Want full repayment math instead? Use the repayment + offset calculator →
Your numbers
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How we got this
Working out the math…
What other refinance calculators get wrong
The refinance question is everywhere — bank websites, comparison sites, broker tools — and almost every consumer-facing version of it is structurally dishonest in the same three ways:
- They show interest savings without subtracting switching costs. Going from 6.5% to 5.99% on a $500k balance is dramatic on paper but pays back about $10,500 over 5 years — meaningfully real, but $1,500 of switching costs eats 14% of that, and the remainder gets traded against your time and the friction of a new lender.
- They show cashback as pure benefit. A $4,000 cashback offer with a 24-month clawback period and a "high refinance-again likelihood" is worth maybe $1,800 of expected value — not $4,000. Most calculators don't ask the clawback question and don't ask the likelihood question, so they show the headline number and call it a day.
- They never mention the retention call. The single most consequential alternative — "ring your current lender and ask them to match" — is invisible in every refinance calculator I've tested. Yet retention teams routinely discount 0.20–0.40% for an existing customer who picks up the phone, with zero clawback risk and zero switching costs. That's a free option that beats refinancing on most files.
The calculator above does the maths properly on all three. The retention break-even rate it surfaces is the number to ask for: "if you can match this rate, I'll stay; if you can't, I'll refinance."
How to use the retention call
Three things make the retention call work:
- Have a written quote. Email yourself the new lender's quote in writing — rate, term, cashback, fees. The retention team's authority to discount scales with how concrete your alternative is.
- Ask for the right team. "I'm thinking about refinancing — can I speak to retention or your discharge team?" Don't ask the general line for a discount. The retention team has different authority and different KPIs (they get measured on retained customers, not net new acquisitions).
- Know your number. The calculator's retention break-even rate is the floor — the rate at which staying matches refinancing. Ask for that or better. If the retention agent counters with a smaller discount, you have a clear comparator.
Worst case: they say no, you refinance, you've spent 15 minutes. Best case: they match, you save the switching costs and the clawback risk, and you're done. The maths above tells you the rate to ask for; the conversation is yours.
What this calculator doesn't model (yet)
- Conditional cashback structures. Some lenders pay cashback only at settlement; others pay it staged over months; a few have eligibility tied to having $X salary deposited monthly. v1 treats cashback as a single payment received at settlement.
- Revert rates from intro periods. If the new offer is an introductory rate (3-month or 6-month honeymoon) that reverts to a higher variable, the calculator over-estimates savings. Use the post-revert variable rate as your input rather than the intro rate.
- Property valuation risk. If your property has dropped in value, the new lender's valuation may force a higher LVR than expected, triggering LMI on the refinance. v1 doesn't model the LMI piece — use the LMI break-even calculator separately if your refinance brings LVR back over 80%.
- Tax effects for investors. Investment loan interest is deductible; switching costs and break costs may or may not be deductible depending on structure. The calculator's pre-tax view holds for owner-occupier files; investor file maths may shift slightly.
- Break costs on fixed loans. If you're breaking a fixed period mid-term, the break cost can be material ($5k–$30k typical). v1 assumes no break cost; if you're on a fixed loan, add the lender's quoted break cost to the switching_cost field.
Bottom line
Refinancing is one of the cleanest financial decisions a borrower has — but only when the maths is honest about cashback clawback, switching costs, and the retention alternative. The calculator above does the honest version. The phone call is yours.