Refinance Calculator
Our refinance calculator shows whether refinancing an existing loan to a lower rate saves money after fees and early repayment charges — and how long it takes to break even. Refinancing can save hundreds or thousands in interest, but only if the saving outweighs the costs of switching.
Refinance Calculator
Compare your current loan or mortgage against a refinanced deal — see monthly and total savings.
When Refinancing Saves Money
Refinancing makes financial sense when the interest saving over the new loan term exceeds the early repayment charge plus any arrangement fee on the new deal. The break-even calculation is simple: if the ERC plus arrangement fee is £500 and the monthly saving is £40, the break-even is 12.5 months. Beyond the break-even, every month of the remaining term adds to your net saving. Use our Debt Consolidation Calculator to model bundling other debts into the refinance, and our Cut Loan Costs Calculator to compare refinancing against simply overpaying.
Frequently Asked Questions
Under Consumer Credit Act rules, ERCs are capped at 1–2 months of interest on amounts repaid early above £8,000. Below £8,000, no ERC is permitted.
Some lenders offer existing customers a rate reduction or top-up loan — this may avoid ERC and arrangement fees, but always compare with the open market.
Not necessarily — you can specify the same remaining term on the new loan. Keeping the same term means the full benefit is the rate reduction.
If you have higher-rate debts alongside the loan being refinanced, bundling them can produce greater savings. Run the consolidated numbers through our Debt Consolidation Calculator.
Compare using APR across multiple lenders, using soft-search eligibility tools to avoid hard-search footprints. Ensure you compare on the same term and amount for a valid comparison.
Enter your current loan details — balance, rate, remaining term — and the refinancing option details. The calculator shows the monthly payment difference and total interest comparison. Refinancing at a lower rate is most valuable when the outstanding balance is large and significant term remains. Against this saving, weigh early repayment charges on the existing loan and any fees on the new product. If your credit profile has improved since taking the original loan, you may now qualify for a substantially lower rate — a brief soft search with major lenders or through a broker can confirm this without affecting your credit file. For secured loans, refinancing involves full new underwriting including a property valuation.
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.