A plain-English explanation of the numbers shown on the results page.
What we compare
We run a full month-by-month amortisation (not a shortcut formula) for three scenarios and compare them side by side:
Your loan today — your current balance, current interest rate, and remaining term, paid on the standard schedule.
Refinance with cashback — the same balance, refinanced at the best fixed rate available in our current rate table, with the net cashback (typically 1% of loan balance less an assumed $1,500 legal fee) applied as a lump-sum reduction of principal on day one.
Continue paying your current amount — as above, but you keep paying the same dollar amount you pay today. The difference between the new lower required payment and what you actually pay is applied to principal every month.
Where the rates come from
We only use rates from the Live Rates table maintained by Myratecheck (sourced from published lender rates and adviser updates). The system automatically selects the lowest rate for a matching fixed term from the Myratecheck panel of lenders. No other rates are assumed.
How the maths works each month
For every month, on every scenario:
interest = balance × (annual rate ÷ 12)
principal = payment − interest
new balance = balance − principal
We loop until the balance reaches zero. Total interest is the sum of the monthly interest amounts. Interest saved is the difference between the current scenario's total interest and the refinance scenario's total interest. Months saved is the difference in payoff length.
Why the lifetime savings can look large
Two things amplify the headline number, and both are important to understand:
The rate gap is assumed to hold for the full remaining term. If your remaining term is 25–30 years, even a 0.5–1.0% gap compounds monthly for decades. On a $600k loan over 30 years, a 0.6% gap alone can equate to tens of thousands of dollars of lifetime interest.
Extra payments compound aggressively. When you choose to keep paying your current amount, the extra dollars each month go straight to principal, which shortens the loan and strips out further years of interest.
The result is a best-case, rates-stay-put, discipline-maintained projection. It is mathematically correct given those assumptions, but real-life outcomes will vary as market rates move up and down over time and as personal circumstances change.
What we do not include
Break fees on your existing fixed loan (these are lender-specific and can materially change the picture).
Low Equity Margins (LEM) where LVR is above 80% — we flag this on the results page but do not price it into the calculation.
Lender-specific special rates that are only available through a broker — an adviser can often obtain a sharper rate than the published one shown here.
Changes in your income, expenses, property value or interest rates over time.
Bottom line: the savings shown are indicative and based on the rate gap between your current rate and today's best published rate remaining constant for the remaining term. Actual outcomes will differ. Please speak with a qualified adviser before making any decision.