Should I remortgage? — savings and break-even analysis
Enter your current mortgage details and the new rate on offer to see the full financial case for switching.
| Period | Gross saving | Switching costs | Net saving | Running total |
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When to remortgage — key timing principles
The right time to act on a remortgage is typically 3–6 months before your current fixed rate expires. Most lenders allow you to lock in a new rate up to 6 months ahead — meaning you can secure today's rate without it taking effect until your current deal ends and without paying an Early Repayment Charge. Waiting until the day your fix expires risks a period on Standard Variable Rate (SVR), which is typically 1–2% above the best available fixed rates.
If you are currently on SVR — having drifted there after a fix expired — the calculation is straightforward: every month you delay costs you the difference between SVR and the best available fixed rate. On a £200,000 IO mortgage, the difference between 7.5% SVR and 4.75% fixed is approximately £375/month. There is almost never a reason to stay on SVR.
For mortgages with Early Repayment Charges still applying, the break-even calculator above tells you whether the monthly saving justifies paying the ERC immediately versus waiting for the ERC window to close.
Frequently asked questions
What are typical remortgage costs in 2025?
The main costs of remortgaging in 2025 are: arrangement/product fee (£0–£2,000, with many competitive products offering fee-free options at a slightly higher rate), legal fees (£300–£600 for a remortgage conveyance — many lenders offer free legal as an incentive), valuation (£0–£400, again often offered free by lenders), and broker fee if using a mortgage broker (£0–£500, though many specialist brokers charge no fee and are paid by the lender). Total switching costs typically range from £0 (on a free-legal, free-valuation, fee-free product) to approximately £2,500–£3,000 for a product with a large arrangement fee and standard legal/valuation costs.
What is a product transfer vs a remortgage?
A product transfer is switching to a new deal with your existing lender — typically with no legal fees, no valuation, and a faster process (sometimes done online within minutes). A remortgage involves switching to a new lender, which requires a full affordability assessment, valuation, and legal work. For most landlords coming off a fix, comparing a product transfer from the existing lender against the whole market via a broker is the right approach. Product transfers are particularly attractive for portfolio landlords whose income has changed since the original mortgage — because the existing lender often does not re-underwrite the full portfolio. A specialist BTL broker can model both options with the actual rates available.
Should I take a 2-year or 5-year fix in 2025?
With base rate at 4.5% in mid-2025 and market pricing implying continued gradual reductions, the case for a 2-year fix is that you could refinance at lower rates in 2027. The case for a 5-year fix is certainty — you know your payment for five years and don't need to refinance again in 2027 (with the associated costs and uncertainty).
In practice, the actual rate difference between 2-year and 5-year fixes in 2025 is often modest (0.1–0.4%), because swap markets already price in expected rate reductions. Check the actual rates available: if the 5-year fix is within 0.25% of the 2-year fix, the certainty of five years' known payments is usually worth the small premium. If the 2-year fix is materially cheaper (0.5%+ lower), the near-term saving may justify the refinancing cost and uncertainty in two years.
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