Refinance calculator
Compare your current mortgage with a new one and see the monthly saving and break-even point.
About the refinance calculator
Compare your current mortgage with a new one and see the monthly saving and break-even point.
Part of SmartCalcy’s mortgage & real estate tools. It runs in your browser with no account, uses your own currency and units (change them at the top of the page), and gives estimates for information only, so check official guidance before you rely on a result.
How to use the refinance calculator
What it calculates and when to use it
Compare your current mortgage with a new one to see the monthly saving, the break-even point on switching fees and the total cost over the loans.
How to use it, step by step
- Enter your current balance, rate and years left.
- Enter the new rate and term, and the fees to switch.
- Tick the box if the fees will be added to the new loan.
- Check the break-even time against how long you expect to keep the loan.
What each input means
- Current balance and rate – What you owe and your current yearly rate.
- New rate and term – The offered yearly rate and length in years.
- Fees to switch – Arrangement, valuation, legal and exit fees.
- Add fees to loan – Rolls the fees into the new balance instead of paying them up front.
How to read the results
- Monthly change – Current payment minus the new payment.
- Break-even point – Fees ÷ monthly saving.
- Total paid – All payments over each loan, plus fees if paid up front.
The formula
Payment = P × r ÷ (1 − (1 + r)^−n) for each loan. Break-even months = switching fees ÷ monthly saving. Total cost compares payment × months on each loan.
A worked example
A 250,000 balance at 6.75% with 27 years left costs 1,679.00 a month. A new 5.75% loan for 27 years with 3,000 of fees costs 1,521.17, a saving of 157.83 a month. The fees are repaid in 1 year 8 months, and the total saving over the loans is about 48,137.
Assumptions and limits
- Both rates are fixed.
- A longer new term lowers the payment but can raise the total cost; the result flags this.
- Tax, cash-out and changes to insurance are not modelled.
Common mistakes
- Ignoring early repayment charges on the old loan.
- Resetting to a 30-year term and ignoring the extra interest.
Frequently asked questions
How low must the new rate be?
There is no fixed rule. What matters is whether the monthly savings repay your fees before you move or switch again.
Should I roll fees into the loan?
It saves cash today but you pay interest on the fees. Compare both ways.
Related tools
Details
- Break-even point
- 1 year, 8 monthstime for monthly savings to repay the fees
- Total paid, current loan
- £543,996.49
- Total paid, new loan
- £495,859.93including fees
- Difference over the loans
- £48,136.56cheaper to switch
- New loan amount
- £250,000.00