This calculator helps you decide whether breaking a fixed mortgage to refix at a lower rate is worth the break fee. You enter your current rate, the new rate, the remaining fixed term and the estimated break fee, and it compares the interest saved against the fee, showing whether breaking puts you ahead.
The interest saving is estimated on your current balance over the remaining fixed term; as you repay principal the real saving is a little lower. Get the exact break fee from your bank, as it changes daily with wholesale rates. Estimate only, not financial advice.
The calculator estimates the interest you would save by moving from your current rate to the new rate on your loan balance over the remaining fixed term. It compares that saving against the break fee you enter. If the saving is larger than the fee, breaking and refixing puts you ahead; if the fee is larger, you are better staying put until your fixed term ends.
On a $500,000 loan, dropping from 7% to 6% saves about 1% a year, or $5,000, over 18 months that is roughly $7,500 of interest. Against a $4,000 break fee, breaking leaves you about $3,500 ahead, so it is worth it here.
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