Free tool for UK landlords
Thinking of leaving your deal early for a better rate, or to release equity? See whether the saving outweighs the early repayment charge, with your new monthly payment, the total cost to switch and the break-even point in months.
Enter your balance, current and new rates to see whether switching now is worth it.
All figures are worked out on an interest-only basis, the usual setup for buy to let. The monthly payment is the interest on the balance, with the loan itself repaid at the end.
Important, not financial advice: This calculator gives estimates to help you weigh up a remortgage. It does not account for product or loan-to-value limits, affordability or rental stress tests, or tax. The figures are illustrations only. Always confirm the exact early repayment charge with your lender and speak to a qualified mortgage adviser before acting.
Leaving a deal early triggers an early repayment charge, so switching costs money before it saves any. Chasing a lower rate often does not pay once that charge and the fees are counted: the saving has to be sizeable, or the charge small, to come out ahead. The real test is whether the savings outweigh the cost inside the new deal's fixed term, which is what the verdict checks. If you are near the end of your deal, waiting for the charge to fall away can be cheaper.
An early repayment charge (ERC) is what your lender charges for leaving a fixed or discounted deal before the tie-in ends. It is normally a percentage of the outstanding balance, and most deals step it down each year, so it is higher early on and smaller near the end. Your mortgage offer or annual statement shows the exact figure and the dates it changes.
The charge is rarely the only cost. A remortgage can also carry:
Fees can often be added to the loan instead of paid upfront, but you then pay interest on them, so the headline saving is not the full picture.
The break-even point is the switching cost divided by the monthly saving: roughly how many months of lower payments it takes for the savings to add up to that cost. On interest only, anything added to the loan stays on the balance, so the saving has to outweigh it rather than pay it off. What counts is whether the break-even lands inside the new deal's fixed term. If it falls after the fix ends the saving never really arrives, because the rate reverts and you would be remortgaging again, so the tool counts only savings within the term you choose.
If the aim is raising money rather than a cheaper rate, a full remortgage is not the only route, and often not the cheapest:
Weigh the ERC against a further advance or second charge before deciding. The profit and ROI calculator shows how the new payment changes your return.
Most of the time yes, as long as it fits the new lender's loan to value limit, commonly around 75% on buy to let, and its affordability checks. The product fee can often be added even where that nudges the loan a little above the cap. On interest only, anything added stays on the balance rather than being paid down.
Within the initial fixed or discounted period you generally cannot avoid the charge; the main way out is to wait until it ends. You can usually start a product transfer with your current lender about three months before the deal finishes, or, if moving to a new lender, start the remortgage around six months ahead so it completes as the charge falls away.
A remortgage to a new lender often takes around four to eight weeks. A product transfer with your existing lender is usually quicker, sometimes a couple of weeks, as there is less underwriting. Valuations, limited company cases and legal work can all add time, so it helps to start early.
You usually need at least around 25% equity, which is up to about 75% loan to value on a standard buy to let. Some lenders go higher, but rates step up as the loan to value rises, so more equity opens up the better deals. Releasing equity pushes the loan to value up, so the same ceiling limits how much you can raise.
When the fixed period ends you usually move onto the lender's standard variable rate, which is normally higher. To avoid sitting on it, remortgage to a new deal or arrange a product transfer with your current lender, ideally starting around six months before your deal ends so a new rate is ready to take over.