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Refinancing Calculator

Calculate potential savings from refinancing your mortgage to a lower rate. Compare your current monthly payment and total cost against a new refinancing deal.

Last reviewed 15 August 2026Source: Bank of England — Statistics

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Calculator inputs

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Rates & sources

Standard amortisation formulas used across UK lenders. Interest rates move daily — confirm with your lender or broker.

Source: Bank of England — Statistics — check the linked guidance and any live quote before acting.

When to use this calculator

  • Before comparing mortgage products, brokers or repayment types.
  • When you want to test how a different deposit, rate or term changes the payment.
  • When you need a quick estimate before using a formal illustration or agreement in principle.
  • When you are stress-testing your budget against a higher rate.

A realistic UK planning example

Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.

A realistic UK planning example
InputValue
Current Balance (£)£1,400
Current Rate (%)5%
New Rate (%)5%
Remaining Term (Years)25 years

After entering these figures, review monthly saving, break-even and new payment together rather than in isolation. Then rerun the tool with one input adjusted.

How to read your results

Monthly Saving

The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.

Break-even

The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.

New Payment

The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.

Method & assumptionsAuthoritative sources

This calculator estimates your potential savings from switching to a new mortgage deal by comparing the total interest payable under your current rate against a proposed new rate. It takes into account your outstanding balance, remaining term, and the one-off costs of switching — including arrangement fees and early repayment charges. The monthly payment figures are based on a standard capital repayment formula, and the break-even calculation divides total switching costs by the monthly saving. This assumes both mortgages run to the same end date. It does not account for changes in property value, future rate movements on variable products, or any changes in your personal circumstances that might affect eligibility. Always obtain a formal mortgage illustration from a regulated adviser before proceeding.

Common mistakes

  • !Mixing up loan amount and property value, which can distort affordability and LTV.
  • !Using a headline rate but forgetting fees, insurance, taxes or repayment type.
  • !Testing only one term length instead of comparing the payment and total cost together.
  • !Forgetting that a repayment mortgage and an interest-only mortgage produce very different monthly figures.

What to do next

  • Run a second scenario with a higher rate or shorter term so you can see the downside clearly.
  • Compare the result with an affordability or overpayment calculator before applying.
  • Note the monthly payment and total interest for your strongest scenarios before you speak to a broker.
  • Check whether a modest overpayment would reduce total interest — use the overpayment calculator next.

Frequently asked

Remortgaging typically pays off when the interest saving over the new deals fixed period exceeds the total fees (product fee, valuation, legal, exit charges). A rough rule of thumb is that a rate drop of 0.5% or more on a £150k+ balance covers typical switch costs within the first year of a 2-5 year deal.

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