Which Loan Sizes and Rate Drops Produce a £100 Monthly Saving
The relationship between loan size, rate difference, and monthly saving is linear. A 1% rate reduction saves approximately £83 per month per £100,000 of outstanding mortgage. So to save exactly £100 per month, you need a rate drop of roughly 1.2% on a £100,000 balance, 0.6% on a £200,000 balance, or 0.4% on a £300,000 balance.
In practical 2025 terms: if you are currently paying your lender's SVR of around 7.5% and can secure a two-year fixed rate at 4.6%, that is a 2.9% reduction. On a £50,000 mortgage that still saves you around £120 per month. On a £40,000 mortgage at a 3% reduction, the saving reaches just over £100 monthly.
Annual saving at £100 per month: £1,200. Five-year saving: £6,000. These figures do not account for product fees, which typically range from £0 to £1,000 on a remortgage. Even after paying a £999 product fee, your net five-year saving remains close to £5,000.
Use the benchmark: for every £100,000 outstanding, a 1% rate drop saves roughly £83/month. Adjust up or down from there to find what rate you need to achieve your £100 target.
What Rate Do You Need to Save £100 a Month?
To calculate the rate you need, work backwards from your target saving. If your outstanding balance is £180,000 and you want to save £100 per month, you need a rate reduction of: (£100 x 12) / £180,000 = 0.67%. So if your current rate is 7.5% SVR, you need a new rate of 6.83% or lower. In today's market, five-year fixed rates around 4.3% are widely available, meaning the actual saving on a £180,000 mortgage coming off SVR would be far greater than £100 per month.
If you are coming off a fixed rate rather than SVR, the calculation is the same. Say your existing fix was 2.1% (typical of 2020-2021 deals) and you are renewing at 4.5% — that is a 2.4% increase, not a saving. In this scenario, remortgaging to the best available deal at 4.3% instead of reverting to a 7.5% SVR could still save you £640 per month on a £200,000 mortgage.
The key takeaway is that almost any homeowner on SVR can achieve a £100 per month saving in 2025. The question is usually how much more than £100 per month they can save, and whether product fees and early repayment charges affect the net outcome.
Speak to a whole-of-market broker to get a precise figure for your specific balance, remaining term, and property value before committing to any deal.
