Break Cost Calculator

Use this calculator to help you estimate your break fee for your loan or mortgage.

If you want to refinance a fixed term loan, or even pay off your entire mortgage early, the bank may charge a ‘Break Fee.’ But it can still make sense to refinance. Did you know that many lenders will cover the costs of your Break Fee if you transfer your mortgage or take out a new loan?

It can be hard to get banks to tell you what your Break Fee might be. This calculator will help you estimate it.

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  • When you take up a fixed rate offer you sign a contract with the bank, which provides certainty for both the lender and the borrower. If you later want to refinance or repay the loan early, the bank needs to recoup the revenue it expected to receive. The Break Fee is meant to cover this.

  • Every loan is different but here’s how most lenders work out how much to charge. They look at the loan amount, and then calculate the difference between the interest they would receive and current market rate. Then they apply this over the remaining term of the loan.

    If your fixed rate still has years to run and interest rates have dropped, the bank will miss out on a lot of revenue. So the break fee will be high.

    But as a borrower, you will also make huge savings from refinancing in these conditions. So it may still be worth breaking your current fix.

    The other thing to keep in mind is that many lenders will cover the cost of your old bank’s break fee if you bring your lending to them. As mortgage brokers, Float can go to the market and negotiate the best deal for you.

    Want to know more? Get in touch.

Call us on 0800 FLOAT UP or you can grab Naylon on 029 200 3711 or Jason on 021 500 838.

You can find us at Level 1, 359 Onehunga Mall, Onehunga. Auckland
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