Know your current loan details
Start by gathering the key facts about your existing mortgage. Write down the interest rate you are paying today. Note whether the rate is fixed or variable. Record the remaining loan term and the outstanding balance. Check any features such as offset accounts, redraw facilities or repayment flexibility. The Reserve Bank of Australia meets eight times a year to set the cash rate, which can influence variable rates. Knowing these details gives you a baseline for comparison.
You can also note the repayment frequency, whether it is weekly, fortnightly or monthly. Check if there are any break costs attached to a fixed‑rate portion. Make a simple spreadsheet or note pad to keep everything in one place. This overview will be useful when you compare other offers.
Keep the summary handy for the next steps. You will refer to it when you talk to lenders or use a calculator.
Compare rates and features
Next, look at what other lenders are offering. Search for advertised variable and fixed rates that match your loan size and term. Pay attention to the comparison rate, which folds in most fees and charges. Small differences in your mortgage interest rate can make a big difference to the long-term cost of your home loan. Also compare features such as offset accounts, redraw options and the ability to make extra repayments without penalty. Build a short list of potential loans and the fees involved.
You can use comparison websites to see a range of rates side by side. Filter the results by loan type, loan‑to‑value ratio and any special conditions. Write down the comparison rate for each product you like. Note any introductory rates that revert after a set period.
Keep the list organized so you can feed the numbers into a calculator later. Having a clear side‑by‑side view makes the next step easier.
Estimate switching costs
Calculate the total cost of moving your mortgage. Include any discharge fee from your current lender, government registration fees and the new lender’s establishment fee. Some lenders charge a valuation fee or a settlement fee. Add any ongoing package fee that applies to the new loan. Once you have a short list of potential loans and the fees involved, use the mortgage switching calculator to work out if you'll save money by changing home loans. The calculator shows the overall saving or cost over the remaining term.
You can also ask each lender for a written fee schedule. Compare the total upfront cost against the projected interest saving. If the upfront cost is high, it could take longer to recoup the cost. Consider whether you plan to stay in the property long enough to recover the cost.
Write down the final figure for each scenario. This figure will guide your decision in the next section.
Use a mortgage switching calculator
Use the mortgage switching calculator with your current loan balance, interest rate and remaining term. Add the estimated fees for the new loan and any discharge costs. The tool will project the interest you would pay under each scenario. Compare the projected total cost of staying versus switching. This helps you see whether the interest saving outweighs the upfront expense. Calculate the cost of switching your mortgage, to decide whether you could save money.
You can run the calculator several times with different rate assumptions. Adjust the loan term to see how a shorter or longer term changes the outcome. Record each result for easy reference.
The output gives a clear picture of the financial impact. Use this picture when you discuss options with your current lender.
Talk to your lender
Tell your current lender you are planning to switch to a cheaper loan offered by a different lender. Ask if they can improve the terms on your existing loan. Note any revised offer in writing so you can compare it with the alternatives you have gathered. This conversation can change the numbers you feed into the calculator.
You can also request a written confirmation of any new rate or feature. Keep a record of the date and the person you spoke with. Having a paper trail makes later comparison simpler.
If the lender matches or beats the external offer, staying might be the simpler choice. If not, the calculator results will show the potential benefit of moving. Decide based on the full picture you have built.
Decide to stay or switch
Review the calculator results together with any revised offer from your current lender. If the total cost of the new loan is lower over the remaining term, switching could be worthwhile. If the savings are marginal, staying put might be simpler. Consider the time and effort involved in completing the switch, as well as any impact on your credit file. Make a decision that aligns with your financial goals and comfort level.
You can also think about how a new loan fits your future plans such as renovations or investment. A loan with flexible repayment options might suit a changing income pattern. Write down the final choice and the reasons behind it.
Set a reminder to revisit the loan later. Regular reviews keep your mortgage aligned with your situation.