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A cheaper headline rate does not always mean a cheaper mortgage. Product fees, legal costs and a changed term all move the total, and a longer new term can lower the monthly payment while raising what you pay overall.
This calculator compares the remaining cost of your current deal with the projected cost of a proposed one, including the fees you enter, and shows the month at which the monthly saving has repaid those fees.
Last reviewed
Estimated net saving
£32,932.95
Figures compare two fixed payment streams. Rates change, and whether a lender will accept your application is not modelled.
The net figure is the total remaining cost of the current deal minus the total cost of the new deal with fees included. A positive number means the proposed deal is cheaper over the terms compared; a negative number means it costs more.
The break-even month only appears when the new monthly payment is lower and there are fees to recover. It is the number of months of reduced payments needed to cover the upfront costs.
Each deal is treated as a repayment mortgage on the same balance. The monthly payment is the level amount that clears the balance over the term at the rate given, using one twelfth of the annual rate each month.
Total cost is the payment multiplied by the number of months, plus any upfront fees for the new deal. Because both sides use the same method, the comparison is like for like.
£200,000 over 20 years, remortgaging to a 4.2% deal with a £999 product fee and £300 of other costs.
The lower rate cuts the monthly payment by roughly £150, recovering the fees within the first year.
Current mortgage balance (£): 200000; Current annual interest rate (%): 5.5; Remaining term (years): 20; Proposed new annual interest rate (%): 4.2; Proposed new term (years): 20; New product or arrangement fee (£): 999; Exit, valuation and legal fees (£): 300
Estimated net saving: £32,932.95
The result depends on the following. If any of them do not match your situation, treat the figure as indicative only.
Two deterministic annuity calculations are compared. No randomisation, market data or forecast is involved: change an input and the result changes in a way you can reproduce by hand.
Break-even is calculated as the upfront fees divided by the monthly payment saving, rounded up to the next whole month.
Adding a fee avoids paying it upfront but means paying interest on it for the rest of the term. Enter it as an upfront fee here to see the cleaner comparison, then consider the interest cost separately if you plan to add it.
Spreading the same balance over more months lowers each payment, but interest is charged for longer. Set the proposed term shorter than the remaining term to see the opposite effect.
Only if you include it in the exit, valuation and legal fees field. Early repayment charges are usually a percentage of the balance and are set out in your current mortgage offer.
Please note: Results are estimates for general information only and are not financial, tax or legal advice. Figures depend on the assumptions listed on each page and on your personal circumstances.
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