How the remortgage calculator works
Remortgaging means moving your mortgage to a new deal, either with a new lender or with your existing one (a product transfer). The question is simple: does the lower rate save more than the cost of switching? The calculator answers it by comparing two versions of your mortgage over the length of the new deal.
- Stay: your balance carries on at your current rate, usually the lender's standard variable rate (SVR) once a fixed deal ends.
- Switch: the same balance and term at the new rate, plus the arrangement fee and any other costs.
For each option it adds up every monthly payment, the fees you pay upfront and the balance still owed at the end of the deal. Including the end balance matters: a lower rate means more of each payment clears the loan, so you finish the deal owing less as well as paying less each month.
The break-even month is the first month where the switch is ahead once the fees are counted.
Worked example: coming off a fix onto a 7% SVR
You owe £200,000 with 25 years left. If you do nothing you'll pay 7%. A five-year fix at 4.5% has a £999 arrangement fee, paid upfront.
- Staying at 7%: £1,413.56 a month
- Switching at 4.5%: £1,111.66 a month, a saving of £301.89 a month
- After five years you'd owe £182,324 by staying but only £175,716 by switching
- Total saving over the five years after the fee: £23,723
- The switch has paid for itself by month 3
If you add the £999 fee to the loan instead, the payment becomes £1,117.22 and the saving drops slightly to £23,511, because you pay interest on the fee for the whole term.
When a fee-free deal is better
A big fee only pays off on a larger mortgage. Take a £200,000 balance moving from 4.5% to a 4.4% two-year fix with a £1,999 fee. The monthly saving is just £11.32, so over two years you'd be £1,602 worse off. As a rough rule, divide the fee by the monthly saving to see how many months it takes to earn back.
Typical remortgage costs
| Cost | Typical amount |
|---|---|
| Arrangement or product fee | Around £1,000, sometimes £2,000 or more on the lowest rates, or none |
| Valuation | Up to £400, often free on remortgages |
| Legal work | Around £300, often paid by the new lender |
| Exit fee to your old lender | Usually £50 to £65 |
| Early repayment charge | Around 1% to 5% of the balance if you leave a deal early |
| Broker fee | Nothing to around £600, depending on the broker |
Tips for remortgaging
- Start looking about six months before your deal ends. Many lenders let you secure a new rate up to six months ahead, and if rates fall before completion you can often switch to the cheaper deal.
- Avoid early repayment charges by timing the switch for when your current deal ends. Enter any charge under "Other switching costs" if you're thinking of leaving early.
- Ask your current lender for a product transfer rate. There's usually no valuation or legal work, though you won't be able to borrow more without checks.
- If your property has gone up in value your loan-to-value may have dropped into a cheaper band. The mortgage calculator shows payments at each rate, and the mortgage overpayment calculator shows what putting the monthly saving back into the mortgage would do.
Frequently asked questions
Is it worth remortgaging to save 1%?
Usually, yes, on a typical balance. On £200,000 over 25 years, dropping from 5.5% to 4.5% cuts the payment by about £116 a month, so even a £999 fee is earned back within a year.
How much does it cost to remortgage?
Arrangement fees are often around £1,000, though fee-free deals exist. Valuation and legal work are frequently free on a remortgage, and your old lender may charge an exit fee of around £50 to £65.
When should I remortgage?
Start about six months before your current deal ends. Switching when the deal ends avoids early repayment charges and stops you moving onto the lender's standard variable rate.
Should I add the arrangement fee to my mortgage?
Adding it means you don't pay it upfront, but you pay interest on it over the whole term. On £999 at 4.5% over 25 years that adds about £667 of interest.
What is a break-even point on a remortgage?
It's the month when the lower payments and lower balance have covered the fees for switching. If it comes after the end of the new deal, the switch costs you money.
Last reviewed October 2026 using 2026/27 figures. This calculator gives an estimate for guidance only.