Mortgage guide
Remortgage Fees And Break-Even Explained
Learn how to compare remortgage fees, lower rates, monthly savings, and the break-even point before switching deals.
Read with the calculator nearby
Use this guide to frame the decision, then model the numbers.
OverPayWise guides explain the trade-offs behind calculator outputs so you can compare scenarios more confidently.
View calculatorsA remortgage can reduce monthly payments, protect against a rate change, or unlock a more suitable mortgage structure. However, the cheapest-looking rate is not always the cheapest overall deal once fees are included.
The key question is whether the saving from a new deal is large enough, and lasts long enough, to justify any product fees, valuation fees, legal costs, or early repayment charges.
Costs To Include In A Remortgage Comparison
- Product or arrangement fees
- Valuation fees
- Legal or conveyancing costs
- Broker fees
- Exit fees from the current lender
- Early repayment charges if switching before the current deal ends
Why Break-Even Matters
A remortgage may lower your monthly payment but still take many months to recover its upfront cost. The break-even point helps you compare the saving with the time you expect to keep the deal.
If you are likely to move, repay a large amount, or switch again soon, a lower-fee option may be more practical than chasing the lowest headline rate.
Check Early Repayment Charges First
If your current mortgage deal has not ended, an early repayment charge can materially change the calculation. Even a good new rate may not offset a large charge quickly.
Compare The New Payment With Your Wider Plan
A lower monthly payment may free up cash for overpayments, emergency savings, or other debts. A higher payment may still make sense if it gives certainty or clears the mortgage sooner.
Frequently Asked Questions
What is a remortgage break-even point?
A remortgage break-even point is the point where the monthly saving from a new deal has covered the cost of switching. If fees are high or the saving is small, the break-even point may be too far away to make the switch worthwhile.
Should I choose the lowest remortgage rate?
Not automatically. A lower rate with a high product fee can cost more than a slightly higher rate with a lower fee, especially if you plan to move or remortgage again before the fee is recovered.