Remortgage Break-Even Calculator

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.

Only if 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. If you break even in month 24 of a five-year fix, the remaining 36 months are pure saving. If you break even in month 58 of the same five-year fix, you are buying two months of saving for a chunky upfront cost - usually not worth it.

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.

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.

For a remortgage, a fee-free broker (Habito, L&C, Trinity Financial, John Charcol, Mortgage Advice Bureau) is usually worth using because they have access to deals you cannot see direct. Many brokers earn commission from the lender so you pay nothing. Always confirm whether the broker charges a separate fee on top of lender commission before signing anything.

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.

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.