Cost-Benefit Analysis of Refinancing: Is It Really Worth It?
Christian Stevens, Mortgage Broker
Published December 2, 2025, 1:19 P.M
Discover when refinancing your home loan is truly worth it. Flint mortgage brokers provide a cost-benefit analysis, assess savings, and help you choose the best refinance strategy in Australia.
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Key Facts
- Refinancing can save thousands over the life of your loan — only if the benefits outweigh the upfront and ongoing costs.
- Compare your current loan against the new offer across interest rates, features, fees, and repayment flexibility.
- Upfront costs like discharge fees, new loan setup, and potential Lenders Mortgage Insurance (LMI) must be factored into your breakeven analysis.
- Flint mortgage brokers provide tailored cost-benefit assessments to ensure your refinance decision is the best suite for Flint and your unique circumstances.
Cost-Benefit Analysis of Refinancing: Is It Really Worth It?
Refinancing your home loan in Australia can offer lower interest rates, access to better features, or financial flexibility — but it’s not free. A smart refinance strategy involves weighing up costs versus long-term benefits.
Here’s how to perform a proper cost-benefit analysis of refinancing, so you know exactly when refinancing your home loan is the best suite for Flint and your financial goals — and when it’s not.
What Are the Main Benefits of Refinancing?
- Lower interest rate: Even a 0.50% reduction can save tens of thousands over the loan term.
- Reduced monthly repayments: Improve cash flow and free up funds for savings, investments, or lifestyle goals.
- Access features like offset or redraw: Pay down your loan faster or access funds flexibly.
- Debt consolidation: Roll higher-interest debts into your home loan to simplify repayments and reduce overall interest.
- Leverage home equity: Fund renovations, investment properties, or major life expenses.
What to Compare When Assessing Value
Factor | What to Check |
Interest rate | Current vs new — even 0.25% can result in substantial savings |
Features gained/lost | Offset, redraw, extra repayments, loan flexibility |
Loan term | Restarting a new 30-year term or continuing current term? |
Repayment amount | New monthly repayments vs current loan |
Flexibility | Does the new loan match your future plans and cash flow needs? |
What Are the Costs of Refinancing?
- Discharge fee from current lender: Typically $150–$400
- New lender application/setup fees: $200–$600
- Valuation and settlement fees: Around $200–$400
- Fixed rate break costs: If exiting a fixed loan early, these can be significant
- Mortgage registration and government fees: Vary by state
How to Do a Cost-Benefit Analysis
- Calculate potential interest savings using your current balance and remaining term.
- Add all one-off switching costs — lender and government fees.
- Estimate how long you’ll hold the new loan — ensure you’ll recover upfront costs.
- Factor in feature value — does the new loan offer offset, redraw, or flexibility that saves more over time?
- Subtract total costs from total savings — a break-even point under 18–24 months usually justifies refinancing.
When Refinancing Makes Financial Sense
- Planning to stay 3+ years: Provides time to recover upfront costs.
- Older loan with limited features: Modern loans with offset or split options can deliver lasting value.
- Equity has increased: A lower loan-to-value ratio (LVR) may unlock competitive refinance rates.
- Consolidating high-interest debt: Even with fees, the long-term savings can be substantial.
When You Might Hold Off
- Near full repayment: If your balance is small, savings may not justify the switch.
- Breaking a fixed rate early: Exit costs could outweigh benefits.
- Uncertain plans: Selling soon? Refinancing may not be worthwhile short-term.
📞 Need Help Crunching the Numbers?
At Flint, we provide personalised cost-benefit assessments to show you:
- Exactly how much refinancing could save you — or cost you
- Whether switching is worth it for your short- and long-term plans
- Which lenders offer the best refinance deals for your situation
Chat with Flint today and discover if refinancing your home loan is the best suite for Flint and your financial strategy — or if staying put is smarter.
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