Remortgage Break-Even Calculator
Wondering whether paying an Early Repayment Charge to leave your current fixed-rate mortgage could be cheaper than staying put? This tool works out the break-even month and the net pound saving so you can discuss the numbers with a qualified mortgage adviser.
Your current mortgage
Typically 1-5% on a sliding scale. Check your mortgage offer or annual statement. Set to 0 if you are out of the fix.
The new deal
Monthly saving
£188
Upfront cost
£5,999
Net saving over the fix
£5,273
Break-even (month 32)
32
Net saving after upfront cost
Across the 5-year new fix
£5,273
Assumes rates do not change again before the fix ends
Across the full remaining term
£50,360
Theoretical maximum if you held the new rate for the full term
Frequently Asked Questions
What is an Early Repayment Charge (ERC)?
An ERC is a fee your lender charges if you leave a fixed-rate mortgage before the fix expires. It is typically 1-5% of the outstanding balance on a sliding scale that reduces each year of the fix. You will find the exact schedule in your original mortgage offer or your annual statement. Once you are out of the fix and on the lender variable rate, there is usually no ERC at all.
When does paying an ERC to remortgage tend to make sense?
On the numbers alone, paying an ERC tends to make sense when the break-even month sits comfortably inside the new fix period. The maths is: upfront cost (ERC plus product fee) divided by monthly saving = months to break even. Breaking even in month 24 of a five-year fix leaves 36 months of pure saving. Breaking even in month 58 of the same five-year fix means buying two months of saving for a large upfront cost. This is illustrative arithmetic, not personal advice - your circumstances, attitude to risk, and the specific product terms all matter and are best discussed with a qualified broker.
Is it better to add the product fee to the loan or pay it upfront?
Paying upfront is cheaper in absolute terms because you avoid paying interest on the fee. Adding it to the loan reduces the cash you need at switch and only adds a small amount to the monthly payment, which is useful if cash is tight. The break-even comparison favours paying upfront when you have the means. The calculator handles both scenarios.
What about rate changes after the new fix ends?
This calculator deliberately stops at the end of the new fix because nobody knows future rates. The "saving over the full remaining term" figure assumes the new rate holds for the rest of the mortgage, which is a theoretical maximum, not a forecast. Use the fix-period number as the realistic case.
Is a mortgage broker worth using for a remortgage?
A whole-of-market mortgage broker can often see deals that are not available direct to consumers, and many brokers are paid commission by the lender rather than charging the borrower a separate fee. The trade-off varies by broker, so always check the broker fee disclosure and the range of lenders they cover before signing anything. The FCA register at register.fca.org.uk lets you check that any broker you use is authorised.
When should I start shopping for a new deal?
Most UK lenders let you secure a new deal up to six months before your current fix ends, with no obligation. If rates drop further before the start date you can usually re-apply at the lower rate. Six months out is the sweet spot - it gives you the rate-lock protection without committing too early.
Does the calculator account for stamp duty or legal fees?
No - a remortgage with the same lender or a straight product transfer usually has no legal fees and no stamp duty. If you are switching lenders, most deals come with free legal work and a free valuation built in. Where they do not, add the legal cost to the product fee input to get the right break-even.
Will I have to pay stamp duty when I remortgage?
No. Stamp Duty Land Tax applies to property purchases, not to refinancing the existing borrowing on a property you already own. A remortgage where the same person owns the same property does not trigger SDLT, even if you are switching lender. The exception is if you are using the remortgage to add a partner to the title and the equity transfer crosses the SDLT threshold, in which case proper conveyancing advice is essential.
What if rates fall further after I lock in?
Most fixed-rate remortgage offers let you swap to a lower rate from the same lender, free of charge, at any point between the application and the completion date (typically up to six months). After completion, you are locked in. If rates fall meaningfully and you are inside your new fix, the ERC on the new deal will usually kill any savings from switching again - the calculator will show this clearly if you re-run it with the new numbers as a hypothetical.
Related reading
UK mortgage types in 2026
Fixed vs tracker vs offset, and which one your remortgage should be.
Invest vs pay off the mortgage
Once the new fix is locked, what to do with surplus cash.
How overpayments cut years off your mortgage
Worked examples on a £300k balance at current rates.
40-year UK mortgages
When stretching the term is a trap and when it is a sensible move.
When switching mortgage actually pays
A new fix is not always cheaper. The early repayment charge on your current deal, the new lender's product fee, valuation costs, and legal costs all stack up against the rate saving. The calculator takes your current rate, the new rate offer, the ERC, the upfront fees, and the months left on your current fix, and works out the breakeven month - the point at which the lower monthly payment has earned back what you paid to switch.
If the breakeven sits after the new fix ends, the switch loses money over the certain cost window and the outcome depends on what rates do at the next remortgage. If the breakeven is well inside the fix term, the maths is far more comfortable. The verdict at the top of the results is colour-coded (green for switch, amber for marginal, red for stay) so you can scan it. This is a maths tool, not regulated mortgage advice - any decision to remortgage should be sense-checked with a qualified broker who can see the actual product terms.
Adding the product fee to the loan instead of paying it upfront is modelled separately. It usually shaves the upfront cost down but adds slightly more lifetime interest because the fee accrues at the mortgage rate for the rest of the term, which on a long mortgage often outweighs the convenience of not writing the cheque.
The complete guide
Remortgage Break-Even Calculator UK: Should You Switch?
UK remortgage break-even calculator. Work out whether paying an Early Repayment Charge plus product fees to switch to a lower fixed rate actually saves you money.
You have spotted a fixed-rate deal that is half a percent below what you are currently paying, and the temptation is to jump. The problem is that the Early Repayment Charge on your current fix, the product fee on the new deal, and the legal and valuation costs all stack up against you before the lower rate gets a chance to pay for itself. A "cheaper" rate is not cheaper if those upfront costs outlast the monthly saving over the term of the new fix.
Our remortgage break-even calculator does the maths in seconds. Plug in your outstanding balance, current rate, ERC percentage, the new rate, the product fee, and the length of the new fix. It tells you the exact month at which the lower payments have earned back what you paid to switch, and whether that month sits inside the new fix (a clear win) or after it (a bet on what rates do next).
Contents
- The Real Cost of Switching
- How the Calculator Works
- Worked Example: £250k at 5% vs 4.5%
- Add the Fee to the Loan or Pay Upfront?
- Fee Deal vs Fee-Free Deal: the Balance Threshold
The Real Cost of Switching
Lenders advertise rates. They do not advertise the total cost of getting into that rate, and that gap is where remortgage decisions go wrong.
Four costs sit between you and a cheaper headline rate:
- Early Repayment Charge (ERC) - if you are inside your current fix, leaving early triggers a percentage charge on the outstanding balance. Many UK five-year fixes use a tiered schedule that steps down each year (for example 5% in year one, dropping by one percentage point a year to 1% in year five), though the exact tiers vary by lender. On a £250,000 balance in year three of a 5/4/3/2/1 schedule, that would be £7,500 of pure dead money. Check your original mortgage offer for the schedule that applies to you.
- Product fee - new lenders commonly charge somewhere in the region of £999 to £1,495 to set up the deal, though some are higher and some are zero. The "lowest" advertised rates often carry the highest fees, which can make headline rate league tables misleading for smaller balances.
- Valuation and conveyancing - often in the £200 to £500 range each where they are not included. Most remortgage deals come with a free basic valuation and free legal work, but check before you assume it. Where they are not included, add them straight to the product fee in the calculator.
- Broker fees - if your broker charges separately from any lender commission, factor that in too. Some UK brokers operate on a fee-free, commission-only basis; others charge the borrower a separate fee. Always read the broker's fee disclosure document before instructing them.
Against all of that, you have the monthly saving from the lower rate. If the upfront cost is £8,500 and the monthly saving is £100, you need 85 months of payments to break even. If your new fix is 60 months long, the maths does not work.
How the Calculator Works
The calculator takes seven inputs and produces a verdict, a break-even month, and a net saving over both the new fix and the remaining mortgage term.
- Outstanding balance - what you owe today, not what you originally borrowed. Find it on your most recent annual statement or in the lender's app.
- Current fixed rate - the rate you are paying now, before any switch.
- Total remaining term - how many years are left until the mortgage is fully repaid. This sets the amortisation schedule. A 25-year remaining term on a £250,000 balance behaves very differently from a 10-year remaining term.
- Early Repayment Charge - the percentage of the outstanding balance your current lender will charge to leave the fix early. Set to 0 if you are already out of the fix and on a Standard Variable Rate.
- New rate - the headline rate on the deal you are considering.
- Product fee - the new lender's arrangement charge. Most fall between £999 and £1,495.
- New fix length - two, three, five, or ten years. This is the certain cost window the break-even has to fit inside.
The output gives you the break-even month (upfront cost divided by monthly saving), the net saving across the new fix at the assumed rate, and a colour-coded verdict: green for switch, amber for marginal (break-even after the fix ends), red for stay.
Worked Example: £250k at 5% vs 4.5%
You have £250,000 outstanding, 25 years left on the term, and you are currently paying 5%. A new five-year fix is available at 4.5% with a 3% ERC on your current deal and a £999 product fee. Should you switch?
The current monthly payment is roughly £1,461. At 4.5%, the new payment drops to £1,390. That is a monthly saving of about £71.
Upfront cost: 3% of £250,000 is £7,500 in ERC, plus the £999 product fee, plus a free valuation and free legals (this is a typical UK remortgage package). Total upfront: £8,499.
Break-even: £8,499 divided by £71 per month is 120 months, or ten years. Your new fix is only five years long. The calculator returns an amber "marginal" verdict, because at month 60 the cumulative saving (£4,260) does not cover the upfront cost (£8,499). You would be £4,239 down at the end of the fix and gambling that the rate environment in 2031 lets you keep that low rate.
Switch the example: drop the ERC to 1% (you are in the final year of your current fix). Upfront cost becomes £2,500 + £999 = £3,499. Break-even drops to 49 months, comfortably inside the 60-month fix. You finish the new fix £760 ahead. The calculator flips to green.
This is the entire point. The same rate gap produces opposite verdicts depending on the ERC. Switching in the final year of your current fix, when the ERC tier is at its lowest, tends to make the arithmetic far more comfortable - though the right decision for you also depends on income stability, future plans, and the specific product terms, which a qualified broker is best placed to weigh.
Add the Fee to the Loan or Pay Upfront?
Most lenders give you a choice: pay the £999 product fee in cash on completion, or have it added to the mortgage balance. The "add to loan" tickbox in the calculator models both.
Paying upfront is mathematically cheaper. The fee is dealt with, done, and never accrues interest.
Adding the fee to the loan looks easier because nothing leaves your bank account, but the £999 then attracts the mortgage rate for the rest of the term. At 4.5% over 25 years, capitalising a £999 fee adds about £670 of lifetime interest, bringing the real cost to roughly £1,670. On a shorter remaining term, the gap shrinks. On a 10-year remaining term, capitalising a £999 fee costs about £1,225 in total.
The right answer depends on what else you would do with the £999. If it would otherwise sit in a Cash ISA at 4% AER, paying it on the mortgage saves you the gap between 4.5% and 4% on the fee, which is trivial. If the £999 would otherwise go into an S&S ISA targeting 7% real returns, the opportunity cost of paying upfront is meaningfully higher. In practice, most people have neither alternative ready to deploy and the question is whether they have the cash today. If yes, pay upfront. If no, capitalising is fine, just go in knowing it costs more in absolute terms.
The calculator's "lifetime saving" and "saving over the fix" panels make the gap visible. Toggle the checkbox and watch the numbers move.
Fee Deal vs Fee-Free Deal: the Balance Threshold
The other recurring remortgage question is whether to take a low-rate-with-fee deal or a fee-free deal at a slightly higher rate. The answer is a balance threshold.
Suppose you have two options on a 5-year fix:
- Deal A: 4.4% with a £999 product fee
- Deal B: 4.7% fee-free
The rate gap is 0.3 percentage points in favour of Deal A. Whether that 0.3% saving outweighs the £999 fee depends entirely on how big your outstanding balance is.
On a £100,000 balance, 0.3% of interest over five years is roughly £1,500 of saving against a £999 fee. Deal A wins by about £500.
On a £50,000 balance, 0.3% of interest over five years is roughly £750 against the same £999 fee. Deal B (fee-free) wins by £249.
The crossover sits at roughly £67,000 for this specific pair. Below that, take the fee-free deal. Above it, pay the fee.
The exact threshold varies with the rate gap. A bigger rate gap (say 0.5 percentage points) lowers the threshold because the per-pound saving is larger. A smaller fee (£499 instead of £999) also lowers it. The calculator handles this implicitly: run both deals through it with your actual balance and compare the net savings over the fix.
This is also why fee-paying deals are advertised so heavily. The headline rate looks better and feeds the comparison-site rankings, but for balances under £100,000 or so, the fee-free option is often the cheaper deal. Check both, do not trust the league table.
Once the new fix is in place, the next question is what to do with any cash surplus. Our calculators on mortgage payments, LTV-band overpayment timing, and invest vs pay off the mortgage cover what to do with extra cash, and the articles on UK mortgage types in 2026 and should I overpay my mortgage cover the wider strategy.