Their bank offered to keep them. It was $152 a month short.

James and Emma fixed the loan on their Western Sydney home for four years in November 2020, when the cash rate was 0.10 per cent, and the fixed period ended in November 2024 with the cash rate at 4.35 per cent. The repayment on the loan, by then around $701,000 with 26 years to run, rose by more than half. Two days after the fixed period ended, their major bank came back with a retention rate to keep them, and they wanted a straight answer: after every cost of moving, was switching worth it, or was the bank’s offer the sensible place to stay?

Why the answer was not obvious

The bank’s offer was real money off the reverted rate, and moving is never free. It meant a discharge fee, the incoming lender’s settlement and document fee, and the NSW fees to discharge one mortgage and register another. Every dollar of that had to be earned back before a switch made sense. One cost did not apply: there was no break fee, because settlement would fall after the fixed period had already expired, which is why the timing of the whole exercise mattered.

The second complication was a $22,400 personal loan with about two years and eight months to run, due to finish in July 2027. It affected how much each lender would let them borrow, and it raised the obvious question of whether to fold it into the home loan and make the monthly total look smaller.

The offer against the market, on the same 26 years

We put the retention offer side by side with the loan we recommended, an owner-occupied principal and interest variable loan from a non-bank lender, on the same remaining term of 26 years. Not a fresh 30. Resetting the term is the oldest trick in a refinance comparison, because it lowers the repayment while adding years of interest, and it is the first thing we strip out whenever someone is checking your refinance options after a fixed period ends. Like for like, the bank’s offer fell short by about $152 a month, or $1,824 a year.

The personal loan stayed where it was. Folding a debt with two years and eight months to run into a 26-year mortgage would have dropped the monthly total and turned a short unsecured loan into debt repaid over decades. We assessed it separately, left it out, and let the home loan comparison stand on its own. The trade-offs between staying and moving are the ones set out in our guide to switching lenders; here the gap was wide enough and the costs low enough that the decision was not close.

The result

The first call was on 6 November 2024, two weeks before the fixed period ended on 20 November. The bank’s retention offer arrived on 22 November, the recommendation was presented and accepted on 29 November, the application was lodged on 2 December and approved unconditionally on 6 December, and the new loan settled on 17 December 2024, 41 days after the first call.

Around $701,000 moved to a non-bank lender as an owner-occupied principal and interest variable loan, not split and not refixed, on the same 26-year remaining term. With the property valued at around $1.2 million, the loan sat at roughly 58 per cent of its value, so no lenders mortgage insurance applied. The total cost of switching was approximately $943.40: a $350 discharge fee, a $250 settlement and document fee from the incoming lender, and about $343.40 in NSW mortgage discharge and registration fees. No application fee, no valuation fee, no break cost. Against the $152 a month the switch saved compared with the bank’s offer, those costs were recovered in about seven months. The personal loan runs on unchanged and finishes in July 2027, when it drops off the household budget instead of lingering inside the mortgage.

If your fixed rate has ended and your bank has offered you a retention rate, the offer is worth having, and it is not the decision. Send us the balance, the offer and the remaining term, and we will compare it against the market on the same term, after every cost, and tell you plainly whether you are better off staying, better off moving, or not yet. Call 1300 112 355. A broker in business hours; after hours a real person answers and books you in.

This client outcome is an example only. Shared with permission; names and identifying details may have been changed. Outcomes vary according to individual circumstances, lender policy and market conditions; a similar result is not guaranteed. Any savings estimate depends on the assumptions stated and may be reduced by fees or changes to loan term, interest rates or circumstances. A lower repayment may increase total interest where the term is extended.