Imagine you are comparing two mortgage options with different interest rates and terms (lengths). 

For instance, Option 1 has a 5-year term and Option 2 starts with an initial 3-year term followed by a 2-year renewal.

You want to find the interest rate for the 2-year term so that the total interest paid on both options is the same over 5 years.

The BER balances the two options over a 2-year term, and despite their different terms, the total interest paid is the same. 

This helps you compare which mortgage option might be better. 

For example, you may choose Option 2 despite having a higher starting rate because you expect rates to fall lower than the BER rate in the second term.