Should You Switch Your Home Loan to Another Bank?
If another bank offers a lower rate than you are paying now, switching your bond can save real money — but switching is not free. You register a new bond and cancel the old one, and those costs have to be earned back before you are actually ahead. This calculator weighs the saving against the cost and shows when you break even.
How Switching Actually Works
You do not simply "move" a bond. The new bank registers a fresh bond over your property and settles the old loan, which is then cancelled. In practice a bond originator or attorney handles the paperwork. The end result is the same outstanding balance at a new, hopefully lower, rate over your remaining term.
The Costs You're Earning Back
Switching has two main once-off costs: bond registration on the new bond — an attorney fee that scales with the loan, plus a deeds-office fee — and a bond cancellation fee on the old one. This calculator estimates them with the same model as our transfer and bond costs tool. Crucially, banks competing for your loan will often absorb some or all of these costs as an incentive, so always ask what a bank will cover before you assume the full figure.
Why the Break-Even Point Matters Most
A lower rate saves a fixed amount each month, but you pay the switching costs upfront. The break-even point — switching cost divided by monthly saving — tells you how long until you are genuinely ahead. A big rate drop on a large balance can break even in months; a small drop can take years. The rule of thumb: if you might sell or move before you break even, switching usually is not worth it.
When Switching Tends to Pay Off
Switching is most worthwhile when the rate drop is meaningful — not just 0.1% or 0.2% — when the outstanding balance is large, so the saving is a percentage of a big number, and when you will keep the bond well past the break-even point. It is also leverage with your current bank: sometimes the cheapest "switch" is your existing bank matching the offer to keep you, with no costs at all.
More Free SA Finance Tools
- Home Loan Repayment Calculator — your full monthly repayment and the effect of extra payments.
- Bond Affordability Calculator — how much home loan you could qualify for.
- Bond vs Rent Calculator — whether buying beats renting and investing.
- Transfer Duty & Bond Costs — the once-off costs of buying or registering a bond.
Disclaimer: Finance Atlas is not a registered Financial Services Provider (FSP). This calculator provides a guideline estimate for educational purposes only and is not financial advice or a quote. Switching costs are estimated and vary by attorney and bank, and many banks negotiate or absorb them. Confirm the exact rate, costs and savings with the bank or a registered bond originator before deciding.