A new refinancing indicates a lower monthly instalment. At the same time, one‑off switching costs are incurred. An initial estimate can show after how many months the presumed advantage would offset these costs. That only makes sense if the lower instalment does not at the same time conceal a slower repayment.
First separate a genuine benefit from the deferred debt reduction
Have both plans checked on the same opening balance, the same observation period and a comparable repayment status. If, after the switch, a larger remaining debt remains, the whole difference in instalments cannot be declared as savings. A mere division would then apparently compare two different financings exactly.
Then record the one‑off charges actually confirmed for the switch. Unknown compensations, security costs or fees remain open. The article does not claim that certain costs always occur, nor that a switch would be possible without consent or notice periods.
A simple hypothetical estimate
For the example it is assumed that the plans are professionally comparable and that there is indeed a €60 monthly cost advantage. The one‑off switching costs are assumed to be €1.800. Without discounting, taxes or further differences, the simple estimate is €1.800 divided by €60 equals 30 months.
After twelve months, in this calculation €720 would have been offset, leaving €1.080 of the switching costs not yet covered by the advantage. After 30 months the assumed break‑even is reached. These figures are not a real loan calculation. They describe only the disclosed linear case.
A variable advantage requires a different calculation
Assume the advantage applies only for twelve months and thereafter amounts to €20 per month. After the first year €1.080 would still be missing. At €20 per month another 54 months would be required; in total it would be 66 months. The attractive first monthly value must therefore not be used for the whole period.
For an actual contract these later amounts must also be confirmed or explicitly calculated as a scenario. Neither a switch to a variable phase nor a time‑limited concession automatically preserves the previous gap.
Connect the period under consideration with your own plans
If a sale or another change is foreseeable, that possible end point belongs alongside the calculated break‑even point. The professional overall calculation can take into account additional aspects that are missing in the rough estimate. A theoretical advantage is also of no use to the household if the initial costs exhaust the reserve it needs.
The result therefore does not read “Switch is worthwhile”, but: Under these checked or assumed conditions the costs would be offset at this time. If a condition changes, the calculation is renewed.