When is refinancing worth it?
Two worked examples. These are illustrations, not client case studies or
current bank offers.
When switching saves money
$800,000 outstanding, 25 years remaining. Rates remain at 3.5% and 2.5% throughout the 24-month comparison.
The interest saving exceeds the switching costs during this period.
Current monthly payment
New monthly payment
Interest saved
Switching costs
Net interest saving
Costs recovered
$4,005
$3,589
$15,747
$2,500
$13,247
Month 4
When staying costs less
$800,000 outstanding, 25 years remaining. Rates remain at 3.5% and 2.5% throughout the 24-month comparison.
The interest saving exceeds the switching costs during this period.
Current monthly payment
Interest saved
Switching costs
Net interest saving
Costs recovered
$1,352
$1,334
$4,005
$2,500
-$2,108
Not within this period
Calculated on reducing loan balances with monthly repayments over the same remaining loan period. Switching costs are paid
separately. Actual rates, fees and repayment dates will affect the result.
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Tell us what you have in mind. No obligation.