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Break-even read
0 months
Waiting for a remortgage read.
What this means
Compare the break-even point with the deal length, not just the monthly saving. A cheaper rate is not automatically a better decision if the switch costs eat most of the benefit.
Professional read
The repayment term and balance stay the same under both options so the comparison is rate-and-fee focused.
Comparing only the monthly payment and ignoring arrangement fees, cashback, legal costs and ERCs.
Once break-even looks acceptable, compare the lender features that matter next: overpayment allowance, portability and future ERC structure.
Tracker deals, fee-added-to-loan cases, or major planned overpayments need a more customised comparison than this first-pass tool.
Cost stack
| Line | Amount |
|---|
Worked examples — see the math on real numbers
When remortgaging early to a lower rate is worth the Early Repayment Charge.
Anita — 2 years into a 5-year fix at 5.5%
| Outstanding mortgage | £185,000 |
| Current rate | 5.5% (3 years remaining on fix) |
| New rate available | 4.0% 5-year fix |
| Early Repayment Charge (ERC) | 3% of balance = £5,550 |
| Remortgage fees (arrangement + legal) | £1,800 |
The math:
- Monthly saving from rate cut: 1.5% on £185,000 = £2,775/year ≈ £230/month
- Annual saving over remaining 3 years of old fix: £8,325
- Total costs to switch: £5,550 ERC + £1,800 fees = £7,350
- Break-even point: £7,350 ÷ £230/month = 32 months
- Time remaining on current fix: 36 months
Result: Anita breaks even at month 32 of a 36-month savings window — barely worth it. If the new fixed period extends past her old fix end-date, savings continue beyond break-even. Generally: ERCs >2.5% rarely justify early switching unless rate cut is 1.5%+.
Mark — 4 years into a 5-year fix, mortgage nearly ending
| Outstanding mortgage | £140,000 |
| Current rate | 6.0% |
| New rate available | 4.3% |
| ERC | 1% of balance = £1,400 (low because near end of fix) |
| Remortgage fees | £1,500 |
The math:
- Monthly saving: 1.7% × £140,000 = £2,380/year = £198/month
- Total switching cost: £1,400 + £1,500 = £2,900
- Break-even: £2,900 ÷ £198 = 14.6 months
- Time to natural fix end: 12 months
- Plus any new fix locks in lower rate going forward
Result: Mark recovers his switching costs in 15 months — slightly longer than the time to natural expiry, BUT the new 5-year fix at 4.3% protects against further rises and removes uncertainty. The decision becomes about rate prediction, not just immediate maths.
Figures use 2026/27 UK tax-year rates and thresholds. Always verify against your specific payslip or tax statement before acting.
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