Remortgage Savings Calculator
Compare your current mortgage deal with a new one to see exactly how much you save each month, your net saving over the new fixed period after fees and any early repayment charge, and how many months it takes to break even. Uses UK compound amortisation with 2025/26 rates.
Enter Your Remortgage Details
| Outstanding Balance | 6.0% → 5.5% | 6.0% → 5.0% | 6.0% → 4.5% | 6.0% → 4.0% |
|---|---|---|---|---|
| £150,000 | ~£43/mo | ~£85/mo | ~£127/mo | ~£168/mo |
| £200,000 | ~£57/mo | ~£114/mo | ~£170/mo | ~£225/mo |
| £300,000 | ~£86/mo | ~£171/mo | ~£254/mo | ~£337/mo |
Figures are illustrative monthly payment reductions, rounded, before fees and any ERC. Use the calculator above for your exact figure.
What Is a Remortgage and Why Compare the Savings?
A remortgage is the process of switching your existing mortgage to a new deal, either with your current lender (often called a product transfer or rate switch) or by moving to a different lender entirely. Most UK homeowners remortgage when their fixed or discounted rate deal comes to an end, because staying put means rolling onto the lender's standard variable rate (SVR), which is almost always considerably more expensive than a fresh fixed deal.
The single most important question is simple: after the costs of switching, am I genuinely better off? A lower headline rate looks attractive, but a £999 product fee and a possible early repayment charge can erode or even wipe out the benefit, especially on smaller balances. This Remortgage Savings Calculator answers that question directly. It compares your current monthly payment with the new one, totals your saving over the new fixed period, deducts the fee and any ERC, and tells you the break-even point in months.
According to UK Finance, hundreds of thousands of fixed-rate deals mature every quarter, and a large share of borrowers who fixed at the historically low rates of 2020–2022 have been remortgaging onto higher rates. With the Bank of England base rate at 3.75% in 2026 (down from a 2023 peak of 5.25%), shopping around at deal-end has become one of the highest-value financial decisions a household can make.
How the Remortgage Savings Calculator Works
The calculator uses the standard UK repayment-mortgage amortisation formula to work out the contractual monthly payment for both your current rate and the new rate, based on the same outstanding balance and remaining term. The monthly payment formula is:
P = outstanding balance, r = monthly interest rate (annual rate ÷ 100 ÷ 12), n = remaining term in months (years × 12)
Here is the step-by-step logic the tool follows once you press Calculate Remortgage Savings:
- Current payment. It calculates your current monthly payment Mcurrent from your balance, current rate and remaining term.
- New payment. It calculates the new monthly payment Mnew using the same balance and remaining term but the new rate. Keeping the term the same gives a fair like-for-like comparison.
- Monthly saving. Monthly saving = Mcurrent − Mnew.
- Gross saving over the fixed period. It multiplies the monthly saving by the number of months in your new fixed period (fixed years × 12). This is the total you save before any switching costs.
- Net saving. It subtracts the arrangement/product fee and any early repayment charge from the gross saving. This is your true benefit.
- Break-even point. It divides your total upfront costs (fee + ERC) by your monthly saving to find how many months it takes for the savings to repay those costs.
Where the new rate is 0% (an unusual but valid edge case, such as a staff or promotional deal), the calculator falls back to a simple capital-only payment of balance ÷ months, so the maths never breaks.
Worked Example: £200,000 Balance, 6.0% to 4.5%
Let us walk through a realistic 2025/26 UK scenario. Imagine a homeowner whose two-year fix has just ended. Their outstanding balance is £200,000 with 22 years remaining, and they have rolled onto an SVR of 6.0%. They are offered a new two-year fix at 4.5% with a £999 product fee and no ERC (their previous deal has expired, so none applies).
| Figure | Value | How it is calculated |
|---|---|---|
| Current monthly payment (6.0%) | £1,375 | £200,000 amortised at 0.5%/mo over 264 months |
| New monthly payment (4.5%) | £1,205 | £200,000 amortised at 0.375%/mo over 264 months |
| Monthly saving | £170 | £1,375 − £1,205 |
| Gross saving over 2-year fix | £4,080 | £170 × 24 months |
| Less product fee | −£999 | Upfront arrangement fee |
| Less ERC | −£0 | Previous deal already ended |
| Net saving over the fix | £3,081 | £4,080 − £999 − £0 |
The break-even point is £999 ÷ £170 ≈ 6 months. Because the borrower intends to keep the deal for the full 24 months, remortgaging is clearly worthwhile: they recover the fee in half a year and pocket roughly £3,081 over the fixed period. (Figures are rounded to the nearest pound; the calculator computes exact pence.)
Early Repayment Charges: When Switching Early Has a Cost
If you remortgage before your current fixed, tracker or discounted deal ends, your lender will usually levy an early repayment charge (ERC). As confirmed by lender guidance such as Halifax and explained in plain English by MoneyHelper, an ERC is typically 1% to 5% of your outstanding balance and usually steps down each year of the deal:
| Year of Fixed Deal | Typical ERC Rate | ERC on a £200,000 balance |
|---|---|---|
| Year 1 | 5% | £10,000 |
| Year 2 | 4% | £8,000 |
| Year 3 | 3% | £6,000 |
| Year 4 | 2% | £4,000 |
| Year 5 | 1% | £2,000 |
| After deal end (SVR) | 0% | £0 |
Enter your ERC into the calculator's dedicated field. If the net saving still comes out positive, switching early may pay even with the charge, which can happen when the rate gap is large and the balance is high. If you are within a few months of your deal ending, it is often cheaper to wait until the ERC disappears. Many lenders let you secure a new offer up to six months in advance and complete the day the ERC drops to zero. Remember that most lenders also allow you to overpay up to 10% of the balance per year penalty-free, which is a separate allowance from the ERC on full redemption.
The Factors That Decide Whether Remortgaging Pays
What moves the net saving the most
- Size of the rate gap. The bigger the difference between your current and new rate, the larger the monthly saving. A 1.5% drop on a large balance can be worth thousands.
- Outstanding balance. The same rate cut is worth far more on £300,000 than on £80,000, because the saving scales with the loan size.
- Fees. A headline-low rate with a £1,499 fee can be beaten by a fee-free deal at a slightly higher rate, particularly on smaller balances. Always compare net, not headline.
- ERC timing. Switching during a fixed period can trigger an ERC of up to 5% of the balance. Waiting until the deal ends usually removes this cost entirely.
- How long you keep the deal. The longer you hold the new rate beyond the break-even point, the more you bank. If you might move home soon, factor in portability.
- Loan-to-value (LTV). If your home has risen in value or you have overpaid, a lower LTV band can unlock a materially better rate.
Remortgage vs Product Transfer: Two Routes to a New Rate
You do not always have to move lender to escape the SVR. There are two main routes, and the calculator works for both because the maths is identical once you know the new rate and fee:
| Feature | Full Remortgage (new lender) | Product Transfer (same lender) |
|---|---|---|
| Rate choice | Whole-of-market — usually the best rates | Limited to your lender's range |
| Affordability checks | Full re-assessment required | Usually none or light-touch |
| Legal & valuation work | Often required (many deals include free legals) | None — no conveyancing |
| Speed | Typically 4–8 weeks | Can complete in days |
| Best for | Those wanting the lowest rate or to release equity | Those wanting a fast, simple switch |
If your circumstances have changed (for example, your income has fallen or you are now self-employed), a product transfer can be the pragmatic choice because it usually avoids a fresh affordability assessment. Where you can pass the checks, a full remortgage opens up the whole market and frequently the cheapest rates.
Bank of England Base Rate Context for 2025/26
The Bank of England base rate is 3.75% in 2026, having been held at that level after a series of cuts from the 5.25% peak reached in August 2023. The base rate feeds directly into tracker and standard variable rates, and indirectly into the swap rates that lenders use to price fixed deals. For anyone sitting on an SVR, the gap between that rate (often 7%–8% at major lenders) and a market-leading fix can be enormous, which is precisely why running the numbers before your deal ends is so valuable.
Fixed-rate borrowers should focus on the actual rate they are offered rather than the base rate when using this calculator. The base rate sets the broad backdrop, but your saving is driven entirely by the difference between your current contractual rate and the new one.
When Remortgaging May NOT Be Worth It
Think twice before switching if…
- Your balance is very small. On a balance under about £50,000, a £999+ fee can swallow most of the saving. A fee-free product transfer is often the better play.
- You are mid-deal with a chunky ERC. A 4%–5% ERC on a large balance can dwarf the saving. Usually better to wait until the charge disappears.
- You plan to move home soon. If you will sell within the new fixed period, check whether the deal is portable, or you could pay another ERC.
- The rate gap is tiny. A 0.1%–0.25% improvement rarely justifies fees on a modest balance. Let the net-saving figure decide, not the headline rate.
- Your circumstances have worsened. A new lender's affordability check could decline you; a product transfer with your existing lender may be safer.
How the Remortgage Calculator Fits Your Wider Finances
This calculator helps you understand your remortgage position using current UK rates and conventions for the 2025/26 period. UK mortgages are regulated by the Financial Conduct Authority (FCA), and all regulated lenders must show you the total cost of a deal, including fees, in their illustration documents. Comparing actual costs rather than headline rates is the heart of a sensible decision, and this tool gives you a clear net figure to inform those comparisons.
Key Information for 2025/26
The Bank of England base rate is 3.75% in 2026. Most lenders permit penalty-free overpayments of up to 10% of the outstanding balance each year, and early repayment charges on full redemption during a deal typically range from 1% to 5% of the balance. A mortgage offer is generally valid for up to six months, so you can lock in a new rate well before your current deal ends.
Example Calculation
Switching a £200,000 balance with 22 years left from 6.0% to 4.5% cuts the monthly payment by about £170. Over a two-year fix that is roughly £4,080 gross; after a £999 fee the net saving is around £3,081, with break-even reached in about six months.
Source: Bank of England Bank Rate, FCA and MoneyHelper guidance. Last Updated June 2026.
Frequently Asked Questions
How much can I save by remortgaging?
Your saving depends on the gap between your current rate and the new rate, your outstanding balance and how long is left on your term. On a £200,000 balance with 22 years remaining, dropping from 6.0% to 4.5% cuts the monthly payment by roughly £170 and saves around £3,081 net over a two-year fixed period after a typical £999 product fee. The calculator above works out your exact figure using the standard UK amortisation formula.
What is the break-even point on a remortgage?
The break-even point is the number of months it takes for your monthly savings to cover the upfront costs of switching — the arrangement or product fee plus any early repayment charge. If your monthly saving is £170 and your total upfront costs are £999, you break even after about six months. If you plan to keep the new deal for longer than the break-even period, remortgaging is usually worthwhile.
Should I pay an early repayment charge to remortgage?
Sometimes. An ERC is typically 1% to 5% of your outstanding balance and applies if you leave a fixed deal early. If the interest saving from a much lower rate over the new fixed period exceeds the ERC plus the product fee, switching can still pay. This calculator deducts both the fee and the ERC from your gross saving, so the "net saving" figure shows the true benefit before you decide.
Is it worth remortgaging for a small rate drop?
It depends on your balance and fees. A 0.25% drop on a £100,000 balance saves only a modest amount each month, which a £999 fee can wipe out. The larger your outstanding balance, the more a small rate cut is worth. Always compare the net saving after fees, not the headline rate — a fee-free deal can beat a lower-rate, high-fee product on smaller balances.
Can I add the product fee to my mortgage?
Yes, most lenders let you add the arrangement or product fee to the loan instead of paying it upfront. This avoids a large cash outlay, but you then pay interest on the fee for the rest of the term, which increases the long-term cost. For an accurate net saving, this calculator treats the fee as an upfront cost; if you add it to the loan, the true cost will be slightly higher than shown.
When should I start looking to remortgage?
Most borrowers start shopping around three to six months before their current fixed or discounted deal ends. A mortgage offer is usually valid for up to six months, so you can lock in a new rate early and switch the moment your existing deal expires, avoiding the lender's higher SVR. Leaving it too late often means rolling onto the SVR, which is typically much more expensive.
Planning the next step? Check what you could borrow with our mortgage affordability calculator, weigh up borrowing against your equity with the second charge mortgage calculator, model different rates with the interest rate calculator, or browse every tool on our complete list of UK calculators.
Related Finance & Mortgage Calculators
Official Sources & References
- Bank of England — Interest Rates and Bank Rate
- MoneyHelper — Should You Remortgage?
- Financial Conduct Authority (FCA)
- Halifax — Early Repayment Charges Explained
Data verified against official UK sources. Bank of England base rate 3.75%. Last checked June 2026.