Short answer
A lower payment may result from a better rate or a longer term. Only remaining interest plus every switching cost reveals the economic saving.
Important variables
- Balance and remaining term
- Current and new APR
- New term
- Fees and early repayment cost
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Worked example
If the payment falls by €80 but switching costs €1,600, fee payback alone takes 20 months. A longer new term may still create more total interest.
Break-even: What changes the result?
A larger rate gap and longer remaining term increase potential saving. High fees or term extension weaken it.
Common mistakes
- Comparing payments only
- Omitting early repayment cost
- Missing the new term
- Using nominal rather than APR
Sources & assumptions
- RATIOXA — Methodology and formulas (2026-08-17)
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