THE NUMBERS, EXPLAINED
How to use this calculator.
Compares monthly payment savings with the upfront cost, excluding tax effects, opportunity costs and early payoff.
Start with your inputs
Enter loan (£), standard rate (%), reduced rate (%), months, points cost (£). Keep amounts in the units shown on each field. The example is a starting point, not a recommended value.
| Input | Example value |
|---|---|
| Loan (£) | 100000 |
| Standard rate (%) | 6 |
| Reduced rate (%) | 5 |
| Months | 240 |
| Points cost (£) | 2000 |
A worked example
With the example inputs above, monthly saving (£) is 56.48. Change the inputs to explore your own scenario.
| Result | Example answer |
|---|---|
| Monthly saving (£) | 56.48 |
| Simple break-even (months) | 35.4137 |
How this is calculated
Monthly saving (£)
monthlyPayment(a, b, d) − monthlyPayment(a, c, d), using the definition below.
Simple break-even (months)
If the reduced rate is lower: e / monthly saving. Otherwise report no saving.
Symbols and units
- a
- Loan (£)
- b
- Standard rate (%)
- c
- Reduced rate (%)
- d
- Months
- e
- Points cost (£)
Use the units shown. A list keeps the order in which you enter its values. The symbol ^ means “raised to the power of”.
Calculation steps and notation
monthlyPayment(P, R, n): P is principal, R the nominal annual percentage and n monthly payments. Let q = R/1200. Payment = P × q / (1 − (1+q)^(−n)). If q = 0, payment = P/n.
Assumptions and limits
Compares monthly payment savings with the upfront cost, excluding tax effects, opportunity costs and early payoff.
Calculations use the values you enter. Blank or invalid inputs show an error instead of silently substituting zero. Results are displayed to useful precision; calculations retain the underlying numeric precision.
Questions about this tool
What does the result tell me?
Monthly saving (£); Simple break-even (months). The result applies to the method and inputs described above. Check the units and assumptions before using it in a decision.
Why might another calculator differ?
Differences in units, rounding, timing or model definitions can produce different answers. Compare the input definitions and the method, rather than only the final number. For this tool: Compares monthly payment savings with the upfront cost, excluding tax effects, opportunity costs and early payoff.
Are my inputs stored or sent to AI?
Calculations on this page happen in your browser. The separate AI question finder sends its submitted conversation to OpenAI; these calculator fields are not sent. Favourites and recent tool names are stored locally. A shared link contains the inputs you choose to include.
Review status
Software example and browser checks are recorded in our quality report. No external expert review is claimed. Created with coding assistance; calculations run as ordinary browser code.
Read the quality report →