whika.nz

Home / Borrowing

Mortgage Break Fee Calculator

Estimate the cost of breaking your fixed-rate mortgage and see if the savings from a lower rate make it worthwhile.

$
%
%
months
months
Break fees are charged when you break a fixed-rate mortgage before the term ends. Banks calculate the fee based on the cost to them of hedging the interest rate difference. Actual fees vary by lender and market conditions.

Comparison

Estimated break fee$3,675
Monthly saving if you break$204
Break-even point18 months

Breaking now costs $3,675 but saves $204/month.

You'd break even in 18 months — potentially worth it if you plan to stay.

Actual break fees vary significantly between banks. Always contact your lender for an exact figure before making decisions. Some banks may negotiate or offer cash incentives to switch.

How it works

Mortgage break fees (also called early repayment or economic cost) are charged when you break a fixed-rate loan term early. The fee compensates the bank for the difference between your contracted rate and the current market rate over the remaining term.

Calculation

If current rates are higher than your rate, the bank may not charge a break fee (they can re-lend at a higher rate). If rates have dropped, you'll likely pay a fee equal to the interest margin × remaining balance × remaining term.

Also in Borrowing

Mortgage CalculatorStudent Loan CalculatorExtra Repayment CalculatorMortgage Stress TestMortgage Holiday CalculatorCredit Card Repayment CalculatorPersonal Loan CalculatorBorrowing Power CalculatorDebt Consolidation Calculator