Finance & Business
Remortgage Calculator UK
Compare your current mortgage rate against a new deal. See your monthly saving, total fees, break-even point, and cumulative savings over time.
Enter your mortgage details to calculate your potential remortgage savings.
Related to Remortgage Calculator UK
The remortgage calculator helps you compare your current mortgage deal against a new one, so you can see whether switching lender or product will genuinely save you money once all associated costs are taken into account. It uses the standard mortgage repayment formula to calculate the monthly payment under both deals, then quantifies the monthly saving and the time needed to recoup any upfront switching costs.
Monthly Payment Formula
Each monthly payment is calculated using the amortisation formula: M = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1], where P is the outstanding mortgage balance, r is the monthly interest rate (annual rate ÷ 12), and n is the number of remaining monthly payments (remaining term in years × 12). Applying this formula to both your current rate and the proposed new rate gives the two monthly payment figures the calculator compares.
Standard Variable Rate (SVR)
When a fixed or tracker deal ends, most borrowers are automatically moved onto their lender's Standard Variable Rate. The average SVR across UK lenders was approximately 6.87% in 2025. Because SVRs are set at the lender's discretion and are not directly tied to the Bank of England base rate, they tend to be significantly higher than competitive remortgage deals — making switching at the end of a fixed term financially worthwhile for most borrowers.
Early Repayment Charge and Arrangement Fees
An Early Repayment Charge (ERC) is a penalty levied by your existing lender if you leave a fixed or tracker deal before its end date. ERCs are typically expressed as a percentage of the outstanding balance — commonly 1–5% — and can run to several thousand pounds on larger mortgages. Arrangement fees are charged by the new lender to set up the product; these range from £0 to around £2,000 and can usually be added to the loan, though doing so means paying interest on them for the full term.
The break-even period is calculated by dividing the total upfront switching costs (ERC plus arrangement fee plus any legal or valuation fees) by the monthly saving achieved with the new rate. If the break-even period is shorter than the length of the new deal, remortgaging is likely to be financially beneficial over that product period.
The results show your new monthly payment, the monthly saving compared to your current deal, the total cost of switching, and the break-even point in months. Use these figures together rather than focusing on the monthly saving in isolation — a large monthly saving can still be poor value if the switching costs are high and the new deal is short.
What a Good Monthly Saving Looks Like
As a general guide, a monthly saving of £100 or more is considered meaningful on a typical UK residential mortgage. Even a saving of £50 per month (£600 per year) can justify remortgaging if the switching costs are modest and the new deal runs for two years or more. Savings below £30 per month are often wiped out by fees unless you are moving to a product with no arrangement fee and no ERC applies.
2-Year vs 5-Year Deals
Two-year fixed deals typically offer slightly lower headline rates but require you to remortgage more frequently, incurring arrangement fees every two years. Five-year fixed deals provide longer payment certainty and reduce the total cost of switching over a decade. In a falling rate environment, a shorter fix allows you to benefit from lower rates sooner; in a rising rate environment, locking in for five years provides greater protection. The calculator's total saving over the deal period helps you compare these scenarios on a like-for-like basis.
If your break-even point is less than the length of the new deal, remortgaging is broadly worthwhile purely on a cost basis. However, also consider whether your circumstances might change — for example, if you plan to sell or move within the deal period, an ERC on the new product could eliminate any savings made.
1. When is the best time to remortgage?
The best time to begin the remortgage process is around three to six months before your current deal ends. Most lenders allow you to secure a new rate in advance, meaning you can lock in a competitive deal without being exposed to SVR in the interim. If you remortgage before your deal ends and an ERC applies, use the break-even calculation to confirm the switch still makes financial sense. If no ERC applies and you are already on the SVR, remortgaging promptly is almost always advantageous.
2. What is an Early Repayment Charge (ERC)?
An Early Repayment Charge is a fee your existing lender charges if you pay off or switch away from a mortgage product before its agreed end date. ERCs are set out in your mortgage offer and are typically calculated as a percentage of your outstanding balance — for example, 3% in year one falling to 1% in year three of a three-year fix. On a £250,000 mortgage, a 2% ERC equals £5,000. Your ERC schedule is detailed in your original mortgage documentation; your lender can also confirm the exact figure that would apply on any given date.
3. How much does remortgaging typically cost?
The main costs of remortgaging are the arrangement fee (£0–£2,000 depending on the product), a valuation fee (often waived by lenders on straightforward remortgages), and legal fees for the conveyancing work required to transfer the mortgage charge (typically £300–£600, though many lenders offer free legals as part of the deal). Some lenders also charge a product or booking fee. Adding up all costs and dividing by the monthly saving gives the break-even period in months.
4. Can I remortgage if I have negative equity?
Remortgaging to a new lender is generally not possible in negative equity, because lenders require the loan to be secured against a property worth more than the amount being borrowed. However, you may be able to switch to a new product with your existing lender — known as a product transfer — as the lender already holds the charge over the property and no new valuation is typically required. Product transfers can still offer significant savings compared to reverting to the SVR, and the process is usually simpler than a full remortgage.
5. What is the scientific source for this calculator?
This calculator uses the standard mortgage amortisation formula (also known as the annuity formula), which is the method specified by the Financial Conduct Authority in the Mortgage Credit Directive Order 2016 and the FCA Handbook MCOB 10 for calculating the Annual Percentage Rate of Charge (APRC) and monthly payment illustrations. The break-even methodology follows standard cost-benefit analysis principles. SVR reference figures are drawn from the Bank of England's published Bankstats (Monetary and Financial Statistics) series on effective interest rates. ERC structures referenced are consistent with typical terms documented in the UK Finance Mortgage Lenders' Handbook.