How This Remortgage Calculator Work

This remortgage calculator is designed to give you a quick snapshot of potential savings. It works by comparing your current mortgage terms with new offers on the market.

You’ll input details about your existing mortgage, such as the outstanding balance, current interest rate, and remaining term. 

Then, you’ll enter information about the new mortgage deals you’re considering.

The calculator crunches these numbers to show you how much you might save each month and over the life of your loan. 

How To Use This Remortgage Calculator?

Using our remortgage calculator is straightforward, but to get the most accurate results, you’ll need to have some key information at hand. 

Here’s what you’ll need to input:

• The value of your property
• Your current mortgage balance
• The remaining term on your mortgage
• Your current interest rate
• Details of any new mortgage deals you’re considering

Once you’ve entered all this information, simply hit ‘calculate’, and voila! You’ll see a breakdown of potential savings and new monthly payments.

📝Things To Consider

While our remortgage calculator offers valuable insights, it’s essential to keep a few things in mind:

• Accuracy is key – The results you get are only as good as the information you put in. Double-check all your figures to ensure you’re getting reliable estimates.
• It’s not a crystal ball – The calculator provides estimates based on current information. Mortgage rates and your financial situation can change, so always consider the results as a guide rather than a guarantee.
• Your personal data is safe – Our calculator doesn’t store any of your personal information, so you can use it with peace of mind.
• It’s not an offer – Remember, the calculator results aren’t a mortgage offer. You’ll need to speak with a lender or mortgage advisor to get an actual mortgage deal.
• Consider all costs – While the calculator focuses on interest rates and monthly payments, remember to factor in other costs like arrangement fees when making your decision.
• Your financial situation – The calculator can’t account for changes in your personal financial situation. If you’re expecting significant changes to your income or expenditure, factor these in when considering remortgaging.

You can use the calculator multiple times with different figures to compare various scenarios. This can help you make a more informed decision about whether remortgaging is right for you.

What Do Your Results Mean?

After you’ve used the remortgage calculator, you’ll be presented with a set of results. Here’s what it means:

• New Monthly Payment – This shows what your new monthly mortgage payment would be under the new deal.
• Monthly Payment Savings – This figure shows how much less (or more) you could be paying each month if you switch to the new mortgage deal.
• Total Lifetime Savings– This is the big picture – how much you could save over the entire length of your new mortgage if you remortgage.
• Loan-to-value (LTV) ratio – This percentage tells you how much of your property’s value you’re borrowing. A lower LTV often means better mortgage rates.
• Yearly Payment Savings – This amount reflects your potential savings over a year if you opt for the new mortgage deal.

Remember, these results are a starting point. They give you a good idea of whether remortgaging could be beneficial, but you’ll need to dig deeper before making a decision.

Digging Deeper: Remortgage Explained

Now that you’ve got a handle on using the remortgage calculator, let’s explore remortgaging in more detail. 

Knowing this concept can help you make a well-informed decision about whether it’s the right move for you.

What is Remortgaging?

Remortgaging is essentially switching your existing mortgage to a new deal, either with your current lender or a different one.

It’s not about moving house – you’re staying put, but changing the financial agreement on your property.

Why Is Remortgaging Important?

Remortgaging can be crucial for your financial health. It gives you the opportunity to:

• Save money by lowering your monthly payments
• Switch to a better interest rate
• Release equity from your home
• Change the terms of your mortgage (e.g., the length of the loan, fixing your mortgage)

In a nutshell, remortgaging can help you SAVE money and give you MORE control over your biggest financial commitment.

Who Should Remortgage?

Remortgaging could be a smart move if:

• Your current fixed-deal is ending soon
• You’ve built up more equity in your home
• Your home’s value has increased significantly
• You want to borrow more against your property
• You’re on a high standard variable rate (SVR)
• You want a better interest rate
• You want your mortgage terms to suit your current situation
• You want to consolidate high-interest debts
• You don’t like your current lender
• You want to release equity for home improvements

However, it’s not a one-size-fits-all solution. You should always consider your individual circumstances before deciding to remortgage.

Who Shouldn’t Remortgage?

Remortgaging might not be the best option if:

• You have a high early repayment charge on your current mortgage
• Your mortgage debt is very small (usually under £50,000)
• Your financial situation has worsened since you took out your current mortgage
• You’re already on a great deal
• Your home’s value has decreased or you have low to negative equity
• You’ve paid almost all of your current mortgage
• You’ll pay exit fees that could negate the benefits.

How Much Can I Save By Remortgaging?

The potential savings from remortgaging can be substantial, but they vary widely depending on your circumstances. 

Here’s an example to illustrate:

Let’s say you have a £200,000 mortgage with 20 years left to run. You’re currently paying 4% interest, which means your monthly payments are about £1,212.

If you remortgage to a 2.5% deal, your monthly payments could drop to around £1,060. That’s a saving of £152 per month or £1,826 per year.

Over the 20-year term, you could potentially save over £36,000 in interest!

Remember, this is just an example.

Your actual savings will depend on your specific circumstances and the deals available when you remortgage. 

Some homeowners save hundreds of pounds per month, while others might save less but benefit from more favourable terms.

Use our remortgage calculator to get a personalised estimate of how much you could save. ⬆️

Remember, even small monthly savings can add up to thousands over the life of your mortgage.

How Long Does It Take To Remortgage?

The remortgaging process typically takes between 4 to 8 weeks from application to completion. 

Here’s a rough timeline:

1. Initial research and decision: 1-2 weeks
2. Mortgage application and supporting documents: 1 week
3. Property valuation: 1-2 weeks
4. Mortgage offer: 1-2 weeks
5. Conveyancing and completion: 2 weeks or more

However, it can be quicker if you’re switching to a new deal with your current lender (known as a product transfer).

To avoid any gaps in your mortgage deal, it’s wise to start looking into remortgaging about 3 to 6 months before your current deal ends. 

This gives you plenty of time to compare offers, gather necessary documents, and complete the application process.

How Much Does It Cost To Remortgage?

Remortgaging isn’t free, but the potential savings often outweigh the costs. 

Typical expenses include:

• Arrangement fees (can be up to £2,000)
• Booking/Reservation fees (cost around £100 and £2,000, and paid upfront to the lender)
• Valuation fees (around £300+ for property valuation)
• Legal fees (£800-£2,000 if you use the lender’s solicitor)
• Broker fees (if you use one – can vary from £0 to £500)
• Early repayment charges (ERCs) (fees for leaving your current deal early; often 1-5% of the outstanding loan.)
• Exit fee (typically around £50-£300)

Some lenders offer fee-free remortgages, which can significantly reduce your upfront costs. 

Always factor in these fees when calculating whether remortgaging is worth it for you.

Common Remortgage Traps to Avoid

While remortgaging can be beneficial, there are some pitfalls to watch out for:

1. Focusing solely on the interest rate. A low rate might seem attractive, but high fees could outweigh the savings. Consider the overall cost of the mortgage.
2. Extending your mortgage term unnecessarily. This might lower your monthly payments, but you’ll pay more interest overall. Consult a good mortgage broker before deciding.
3. Ignoring the standard variable rate (SVR). If you don’t remortgage when your fixed term ends, you’ll likely be moved to your lender’s SVR, which is often much higher.
4. Not considering your loan-to-value (LTV) ratio. A small decrease in your LTV can sometimes unlock much better rates.
5. Overlooking prepayment penalties. Make sure the savings from remortgaging outweigh any early repayment charges on your current mortgage.
6. Not shopping around. Don’t just accept the first offer you receive. Compare deals from multiple lenders to find the best one for you.
7. Ignoring additional features. Look beyond the rate to features like overpayment allowances or the ability to port your mortgage if you move house.

By being aware of these traps, you can make a more informed decision about remortgaging. 😀

Comparing Remortgaging with Other Options

Remortgaging isn’t your only option for managing your mortgage. Other alternatives include:

• Product transfer – This involves switching to a new deal with your current lender. It’s often quicker and involves less paperwork than a full remortgage, but you might miss out on better deals elsewhere.
• Further advance – If you need to borrow more, your current lender might offer a further advance. This is essentially a top-up on your existing mortgage. It’s often quicker than remortgaging but might not offer the best rates.
• Second charge mortgage – This is an additional loan secured against your property. It can be useful if you need to borrow more but can’t remortgage (perhaps due to early repayment charges). However, rates are typically higher than on a first charge mortgage.
• Staying put – Sometimes, especially if you’re on a competitive rate or face high early repayment charges, it might be BEST to stay on your current deal.

Each option has its pros and cons, and what’s best depends on your circumstances. 

Our remortgage calculator can help you compare remortgaging against your current mortgage, but for a full comparison of all options, it’s worth speaking to a good mortgage advisor.

The Pros & Cons of Remortgaging

With any financial decision, remortgaging has its advantages and disadvantages. Here’s an overview:

Pros:

• Potential for lower interest rates and reduced monthly payments
• Opportunity to release equity from your home
• Ability to switch to a more suitable mortgage product
• Potential to reduce the overall cost of your mortgage
• Chance to consolidate other debts (although this requires careful consideration)

Cons:

• Fees and charges associated with remortgaging
• Potential for early repayment charges on your current mortgage
• The remortgage process can be time-consuming and require paperwork
• You might not be eligible for the best deals if your circumstances have changed
• If you extend your mortgage term, you could pay more interest overall

How To Remortgage?

If you’ve used our remortgage calculator and decided that remortgaging could be right for you, here’s a step-by-step guide to the process:

1. Check your current mortgage details, including any early repayment charges
2. Calculate your loan-to-value ratio.
3. Check your credit score
4. Research available deals or speak to a mortgage broker
5. Get a decision in principle from a lender
6. Submit a full mortgage application
7. Get your property valued
8. Receive and accept a formal mortgage offer
9. Complete the legal work
10. Complete the remortgage

Remember, you can start this process 3-6 months before your current deal ends to ensure a smooth transition.

The Bottom Line

Remortgaging can be a smart financial move, potentially saving you thousands of pounds over the life of your mortgage. 

Our remortgage calculator is a great starting point to see if it could benefit you. However, remember that it’s just a tool – for personalised advice, always consult with a qualified mortgage advisor.

A good mortgage broker can help you:

• Access to deals from many lenders, not just a limited selection.
• Find the best mortgage for your specific needs and situation.
• Guide you through the application process, ensuring paperwork is completed and submitted on time.
• Help you understand the details of each offer so you can make an informed decision.

Whether you decide to remortgage or stick with your current deal, the KEY is to stay informed about your options. 

Keep an eye on interest rates, regularly review your mortgage, and don’t be afraid to shop around.

Your home is likely your biggest asset, so it pays to manage your mortgage wisely. Happy remortgaging! 🎉

FAQs

Can I remortgage early?

Yes, you can remortgage before your current deal ends. However, you may face early repayment charges, which can be substantial. 

Is it cheaper to remortgage?

It can be, especially if you can secure a lower interest rate. However, you need to factor in any fees associated with remortgaging. 

Can I remortgage to pay off debt?

Yes, some people remortgage to consolidate debts. However, this means securing previously unsecured debt against your home, which carries risks. Always seek professional advice before doing this.

Can I still remortgage with a debt management plan?

It’s possible, but more challenging. Lenders will scrutinise your financial situation closely.

What happens if I don’t remortgage?

If you don’t remortgage when your current deal ends, you’ll usually be moved onto your lender’s standard variable rate (SVR), which is often higher than other available rates.

Can I remortgage with bad credit?

It’s possible, but you may have fewer options and face higher interest rates. Some specialist lenders cater to those with poor credit histories.

>> More about Remortgaging with Bad Credit