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Fixed rate break cost calculator.

Leaving a fixed rate before the end of the term can trigger a break cost. It is how the lender recovers the interest it loses when you repay early and can only lend the money out again at today’s rate. Enter your balance, your fixed rate, the rate today for the time you have left and the months remaining to see an indicative figure.

This is an estimate only. Every lender has its own formula, so ask yours for a written break-cost estimate before you decide anything.

Loan balance you would repay

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How this calculator works.

  1. The rate gap is your fixed rate less today’s rate for the time you have left. If today’s rate is the same or higher, the calculator shows no cost.
  2. The lender’s monthly loss is your balance times the rate gap, divided by 12.
  3. That monthly loss, over the months you have left, is discounted back to today at the current rate, which is the standard way to value a stream of payments. The total is the indicative break cost.
  4. Your balance is held flat over the rest of the fixed term. That slightly overstates the cost on a principal & interest loan, where the balance is falling.

What it assumes

  • The starting scenario is a balance of $500,000 on a 6.5% fixed rate, with today’s rate at 5.5% and 24 months left. The two rates are examples, not market rates.
  • Administration fees and any other exit costs are not included.
  • No gain is passed back to you if rates have risen.
  • Assumptions last reviewed 25 September 2026.

Questions people ask.

What is a fixed rate break cost?

It is an amount a lender can charge when you repay a fixed rate loan, or switch it, before the fixed term ends. It is meant to cover the lender’s economic loss from having to re-lend the money at a lower rate.

How do lenders calculate break costs?

Each lender has its own method. In general it compares your fixed rate with the rate the lender could earn for the remaining term, applies the difference to your balance and adds an administration fee. With the starting numbers this calculator estimates about $9,449. Your lender’s figure will differ.

When is the break cost zero?

When today’s rate for the remaining term is the same as or higher than your fixed rate, the lender has no loss to recover, so there is usually no economic cost. An administration fee may still apply.

How can I avoid break costs?

Options include waiting for the fixed term to end, using any extra repayments your loan allows, or asking your lender whether it will move you onto a new rate without a full break. Check your loan contract and ask for a written estimate first.

Can a lender charge an exit fee on a variable loan?

Since 1 July 2011 lenders cannot charge early exit fees on new variable-rate home loans. Fixed-rate loans can still carry a break cost, which is a different charge.

Is the calculator’s figure what I will be charged?

No. It is an indication of the size of the cost, based on a simplified method. The lender’s own wholesale rates, formula and fees decide the real amount.

More calculators.

Fixed Rate Break Cost Calculator | Siare