Calculate Your Total Mortgage Exit Cost

Is It Worth Leaving Your Mortgage Deal Early?

With mortgage rates having risen sharply in recent years and now beginning to fall, many homeowners are asking whether it makes financial sense to break out of their current fixed rate deal early to secure a lower rate. The key question is whether the monthly savings from a lower rate outweigh the total cost of exiting — primarily the ERC, but also legal and arrangement fees.

This calculator helps you work out the break-even point: the number of months it takes for the monthly savings to repay the total exit cost. If you plan to stay in the property and keep the mortgage for longer than the break-even period, switching early is likely to be financially worthwhile.

Frequently Asked Questions

What is a mortgage early repayment charge?

An Early Repayment Charge (ERC) is a fee charged by your lender if you repay your mortgage, switch to a new deal, or overpay beyond your allowed limit during a fixed or tracker rate period. ERCs are typically expressed as a percentage of the outstanding mortgage balance, ranging from 1% to 5%, and usually decrease the closer you are to the end of your deal.

How much is a typical ERC in the UK?

A typical ERC in the UK is 1–5% of the outstanding mortgage balance. On a £200,000 mortgage, a 2% ERC would cost £4,000. ERCs commonly reduce on a sliding scale — for example, 3% in year one, 2% in year two, 1% in year three. Always check your mortgage offer document for the exact ERC schedule.

Should I break my fixed rate mortgage early?

Breaking a fixed rate mortgage early is worth considering if the monthly saving from a lower rate outweighs the total exit costs (ERC + fees) within a reasonable timeframe (typically 12–24 months). Use a mortgage exit calculator to compare the total cost of staying versus switching. Rate falls of 1% or more can make switching worthwhile even with a 2% ERC on a large balance.

How to avoid ERC when remortgaging?

The safest way to avoid an ERC is to wait until your fixed rate period expires and remortgage during the standard variable rate (SVR) period. Most lenders allow you to lock in a new deal 3–6 months before your current deal ends without triggering an ERC. You can also make use of allowed overpayments (typically 10% per year) to reduce the balance before switching.

What fees are involved in switching mortgage in the UK?

When switching mortgage in the UK, you may face an Early Repayment Charge (1–5% of balance), a deeds release/mortgage exit fee (£50–£300), legal/conveyancing fees (£300–£1,000), a new lender arrangement fee (£0–£2,000), and a valuation fee (£0–£500). Some lenders offer fee-free remortgage deals which can make switching more cost-effective.