Ditch Your Fixed Rate Calculator
Our ditch your fix calculator tells you whether it is worth breaking out of your current fixed-rate mortgage early — paying the Early Repayment Charge (ERC) now to access a better rate — or staying put until your fix expires. As interest rates change, this calculation can save or cost thousands of pounds and deserves careful analysis.
Ditch Your Fix
Should you pay the Early Repayment Charge to leave your current fix early and switch to a better rate?
When Breaking Your Fix Makes Sense
Breaking a fixed mortgage early makes financial sense when the interest saving on the new (lower) rate, over the remainder of your current fixed period, exceeds the cost of the ERC plus any arrangement fee on the new deal. This is a straightforward calculation — but it requires you to know your ERC amount (stated in your mortgage offer documents), your current outstanding balance, and the rate difference.
On a £200,000 balance with 18 months remaining on a 5.5% fix, an ERC of 2% (£4,000) and a new rate of 4.2% available: the monthly interest saving is approximately £217 per month. Over 18 months, the total saving is £3,906 — just below the £4,000 ERC. In this case, staying put is marginally better. But if the new rate is 3.9%, the saving rises to £250 per month and £4,500 over 18 months — making the switch worthwhile.
The Hidden Costs of Switching
Beyond the ERC, switching lenders typically incurs a new valuation (£300–£600), legal fees (£300–£500 or free with some products), and potentially a new arrangement fee (£0–£1,999). Internal product transfers with the same lender often avoid legal and valuation costs entirely — making a product transfer the first option to explore if your current lender is offering a competitive rate.
Frequently Asked Questions
ERCs are typically 1–5% of the outstanding balance, decreasing each year of the fixed period. A 5-year fix might carry an ERC of 5% in year one, 4% in year two, 3% in year three, 2% in year four, and 1% in year five. Check your original mortgage offer document for the exact ERC schedule.
If you are moving home during a fixed period, most lenders allow you to port (transfer) your existing mortgage to the new property, avoiding the ERC. Any additional borrowing beyond the ported amount is arranged separately at the current rate. Porting is subject to fresh affordability assessment.
The payback period is the ERC divided by the monthly saving on the new rate. An ERC of £3,000 and a monthly saving of £150 gives a 20-month payback. If you are planning to stay in the property for longer than the payback period, breaking early is likely worthwhile.
A product transfer with your existing lender is faster (no legal work), cheaper (no valuation or legal fees), and does not require a new affordability assessment in most cases. The rate may be slightly higher than the best market deals, but the lower switching costs often tip the balance in favour of a transfer for smaller mortgages. Use our Compare Fixed Mortgages Calculator to run both numbers.
Breaking a fix and remortgaging requires your property to have sufficient equity for the new LTV requirement. In negative equity, remortgaging to another lender is rarely possible. Staying with the current lender for a product transfer may still be an option — speak to your lender directly.
Enter your remaining fixed-rate mortgage balance, current rate, and the early repayment charge you would face for leaving. Then enter the rate available on a new deal. The calculator compares the total cost of staying on your current fix for the remaining term versus paying the ERC and switching to the new rate immediately. An ERC that looks large often proves worthwhile if the rate saving over the remaining term exceeds it — the calculation is not always intuitive. This is particularly relevant when fixed rates have risen significantly after your deal was taken out: even paying a substantial ERC to exit a historically low rate can make sense if your revert-to-SVR rate is substantially higher and a new competitive fix is available.
Important Information
This calculator is provided for general information and planning purposes only. It does not constitute financial or tax advice and should not be relied upon as such. Figures are indicative estimates based on simplified, publicly available criteria and stated assumptions. Actual results depend on your full circumstances. See our Disclaimer for further information.