Should you refinance?
The 25-bps rule, break-even maths, and the four situations where staying put is the right move.
The break-even test
Total switching costs (discharge + government fees + valuation + new app) divided by monthly saving = months until you’re ahead. Under 18 months is usually a yes; over 36 months is usually a no.
When NOT to refinance
Selling within 24 months. Income just dropped or job changed in last 90 days. Currently in fixed period with significant break costs. Recent late payments on existing loan.
WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Comparison rates are calculated on a secured loan of $150,000 over 25 years for home loans and a loan of $30,000 over 5 years for car and personal loans, unless the lender states another basis. Business loans and equipment finance for a business purpose have no mandatory comparison rate.