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Break-even read
0 months
Waiting for a remortgage read.
What this means
The break-even point is set against the length of the new deal as well as the monthly saving: a lower rate can still leave little or no net saving once the switching costs are counted.
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 |
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Worked examples — see the maths on real numbers
How the calculator weighs an early repayment charge and fees against a lower rate, using the same method as the tool above. The figures are illustrative.
Anita — 2 years into a 5-year fix at 5.5%
| Outstanding mortgage | £185,000 repayment mortgage, 23 years left |
| Current rate | 5.5% (3 years left on the fix) |
| New rate available | 4.0% for 5 years |
| Early repayment charge (from her offer) | 3% of the balance = £5,550 |
| Remortgage fees (arrangement + legal) | £1,800 |
The maths:
- Monthly payment over 23 years: £1,182.68 at 5.5%, £1,026.29 at 4.0%
- Monthly saving: £156.39
- Net switching cost: £5,550 ERC + £1,800 fees = £7,350
- Break-even: £7,350 ÷ £156.39 = 47 months (rounded up), inside the new 60-month deal
- Her current fix ends in 36 months, when she could move without an ERC; by then the saving would have recovered about £5,630 of the £7,350
Result: The calculator shows break-even at 47 months, inside the new five-year deal. Because her current fix ends in 36 months anyway, the comparison that matters after that is with the rates on offer then, which are not known today. On a repayment mortgage the monthly saving (£156) is smaller than the first month's interest saving (1.5% × £185,000 ÷ 12 = £231), because part of each payment repays capital.
Mark — 4 years into a 5-year fix
| Outstanding mortgage | £140,000 repayment mortgage, 15 years left |
| Current rate | 6.0% (12 months left on the fix) |
| New rate available | 4.3% for 5 years |
| Early repayment charge (from his offer) | 1% of the balance = £1,400 |
| Remortgage fees | £1,500 |
The maths:
- Monthly payment over 15 years: £1,181.40 at 6.0%, £1,056.74 at 4.3%
- Monthly saving: £124.66
- Net switching cost: £1,400 + £1,500 = £2,900
- Break-even: £2,900 ÷ £124.66 = 24 months (rounded up), inside the new 60-month deal
- His current fix ends in 12 months; by then the saving would have recovered about £1,496 of the £2,900
Result: The calculator shows break-even at 24 months, inside the new deal, but only about half the cost is recovered before his current fix would have ended. Waiting 12 months avoids the £1,400 ERC; switching now keeps 4.3% for five years, while the rates on offer in a year are not known.
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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