How to Use the Remortgage Break-Even Calculator

The free Remortgage Break-Even Calculator compares the cost of staying on your current mortgage with the cost of switching to a new rate. It includes product fees, legal and valuation costs, broker fees, cashback and any early repayment charge (ERC), then shows monthly savings, months to recoup the cost, net saving over your chosen horizon, an interactive cost chart and a year-by-year breakdown.

Step-by-Step Guide

1. Enter Your Current Deal

Start with the mortgage you have today:

Currency: Select your preferred currency (GBP is the default for this UK-oriented tool).
Outstanding Balance: The amount still owed — not the original loan.
Property Value: Used only to show current and new loan-to-value (LTV). It does not change the payments.
Current Interest Rate: The rate you pay now (fixed deal or SVR).
Remaining Term: Years left until the mortgage is scheduled to be repaid.
Mortgage Type: Repayment (capital and interest) or interest-only.

2. Enter the New Deal

New Interest Rate and New Term — the term can match the remaining years or be shorter/longer.
Comparison Horizon: toggle Deal period (how long you expect to keep the new product) or Full term (run both paths to the end of the longer mortgage).
New Deal Period: typically 2 or 5 years for a UK fix. Used when Deal period is selected.
Cash-Out / Extra Borrowing: optional extra amount added to the new loan (home improvements, debt consolidation). Treated as cash you receive at completion.

3. Add Switching Costs

ERC: enter as an amount or as a percentage of the outstanding balance.
Exit / admin / deeds fee on the current lender.
Arrangement / product fee on the new deal. Tick Add product fee to the new loan if you will roll it into the balance instead of paying cash.
Valuation, legal and broker fees — set to zero if the lender or broker covers them.
Cashback reduces the net switching cost.

4. Read the Results

Figures update as you type. The calculator uses the standard monthly repayment formula and a month-by-month comparison of both paths:

Repayment: M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1)
Simple break-even (months) ≈ Net switching cost ÷ Monthly payment saving

Net saving over comparison: stay payments minus (switch payments + cash fees), plus the difference in remaining balances, plus cash-out received. A lower remaining balance on the new loan is extra value.
Break-even: first month where cumulative switch cost (fees + new payments) falls to or below cumulative stay payments.
Chart: two cumulative cost lines. The vertical marker is the cash break-even month.
Year-by-year table: running payments, interest saved that year, both balances and the economic net position.

Tip: A cheaper headline rate with a large fee can lose over a 2-year fix and still win over 5 years. Toggle the horizon and the deal period to test both.

Common Scenarios & Examples

Scenario: Switching after the deal has ended

Goal: Leave a higher rate (or SVR) for a 5-year fix and see how quickly typical fees are recovered.

Leave currency on GBP.
Outstanding Balance £200,000 on a property worth £285,000.
Current rate 5.49%, remaining term 22 years, repayment.
New rate 4.19%, new term 22 years, deal period 5 years.
Product fee £999 and exit fee £75. ERC, valuation, legal and broker at 0 (free package / deal already ended).

Sample Inputs:

Balance £200,000 · Property £285,000 (~70% LTV)
Current 5.49% · New 4.19% · 22 years · 5-year comparison
Fees: product £999 + exit £75

Approximate results: monthly payment falls by about £145 · fees recouped in roughly 7–8 months · five-year net saving (including extra capital repaid) is several thousand.

Scenario: Breaking a fixed rate early

Goal: Test whether a 3% ERC is worth paying to grab a lower rate now.

Keep the same balance, rates and 5-year deal period as above.
Set ERC mode to % and enter 3 (3% of £200,000 = £6,000).
Leave the other fees as they are. Compare Deal period vs Full term.

What to look for:

Simple payback stretches to around four years. That can still win inside a 5-year fix, but it usually loses inside a 2-year window — which is why horizon and ERC dominate the decision, not the rate alone.

Scenario: Fee-heavy low rate vs staying put

Goal: See whether a headline rate is just a fee in disguise.

Try a new rate only 0.15 percentage points lower with a £1,999 product fee and a 2-year deal period.
On a smaller balance the fee often exceeds two years of interest saving.
Tick “Add product fee to the new loan” to see how rolling the fee up changes the monthly figure and the end balance.

Disclaimer & Limitations

Not regulated mortgage advice: This calculator is an estimation and educational tool. It does not constitute mortgage advice, financial advice or a personal recommendation. Actual products, ERCs and fees are set by lenders. Consult a qualified, regulated mortgage adviser before switching.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Assumptions: Constant interest rates, monthly rest repayment (or interest-only with an unchanged balance), fees paid at completion, cashback received at completion, no further product switches after the comparison window, and no tax, inflation, offset or overpayment modelling unless you change the inputs yourself. ERC is taken as the amount or percentage you enter — the tool does not compute a lender-specific interest-rate differential (IRD).

Estimation only: The chart and table are illustrations. Eligibility, LTV bands, stress tests, early-repayment allowances and the exact redemption figure from your current lender can all change the real result.

Bug Reports and Suggested Improvements

Please email all suggestions for improvements and any bug reports to: remortgagebreakevencalc@personalfinances.me, thank you.

Remortgage Break-Even Calculator – Free Switch Cost & Savings Tool

📋 Deal Details

📊 Results

📅 Year-by-Year Comparison