Remortgage Calculator UK - Should You Switch Your Mortgage?
Our remortgage calculator helps you determine whether switching to a new mortgage deal makes financial sense. By comparing your current rate with available rates and factoring in all the associated fees, you can see your potential savings and calculate exactly when you'll break even on the costs. According to Money Helper, thousands of UK homeowners could save money by remortgaging when their fixed rate ends. Use this calculator alongside our current mortgage rates comparison to find the best deal for your circumstances.
Remortgage Savings Calculator
Your Current Mortgage
Remortgage Costs
Total Fees: £1,799
When Should You Remortgage?
- • Your fixed rate deal is ending soon (start looking 3-6 months before)
- • You're on your lender's Standard Variable Rate (SVR)
- • Interest rates have dropped significantly since your last deal
- • Your property value has increased, giving you a lower LTV
- • You want to release equity or change your mortgage term
How the Remortgage Calculator Works
The remortgage calculator compares the total cost of staying on your current mortgage deal versus switching to a new one. It takes into account not just the interest rate difference, but all the fees involved in remortgaging, giving you a true picture of your potential savings.
What the Calculator Considers
When you enter your mortgage details, the calculator performs several key calculations to determine whether remortgaging is worthwhile:
- Monthly payment comparison: Calculates your current monthly payment and what it would be on the new rate, showing you the immediate monthly saving.
- Total cost over deal period: Multiplies monthly payments by the deal length to show the full cost of each option.
- Net savings after fees: Deducts all remortgage costs from the interest savings to show your true benefit.
- Break-even analysis: Calculates how many months it takes for the monthly savings to cover the upfront fees.
Understanding the Break-Even Point
The break-even point is crucial for deciding whether to remortgage. If you plan to move house or remortgage again before reaching break-even, switching might not be worthwhile. The Financial Conduct Authority recommends considering how long you'll stay on the new deal before committing.
For example, if your total fees are £1,500 and you save £150 per month, your break-even point is 10 months. Any savings after that point are pure benefit. If your new deal is for 5 years (60 months), you'd have 50 months of savings after breaking even.
When Should You Remortgage?
Remortgaging at the right time can save you thousands of pounds over your mortgage term. Here are the key situations when you should consider using this remortgage calculator to evaluate your options:
Your Fixed Rate is Ending
Start looking 3-6 months before your deal ends. Most lenders let you lock in a new rate up to 6 months in advance, protecting you from rate increases.
You're on the SVR
Standard Variable Rates are typically 2-3% higher than fixed rates. Check our current rates to see potential savings.
Your Property Value Has Increased
According to the UK House Price Index, property values have risen significantly in many areas. A lower LTV unlocks better rates.
You Want to Release Equity
Remortgaging lets you access the equity in your home for renovations, debt consolidation, or other purposes while potentially getting a better rate.
When Remortgaging Might Not Be Worth It
While remortgaging can save money, it's not always the best option. Consider staying with your current deal if:
- You have significant early repayment charges that outweigh potential savings
- Your circumstances have changed and you might not pass affordability checks
- You plan to move house within the next 1-2 years
- The rate difference is minimal and fees would take years to recoup
- Your credit score has declined since your original mortgage
Remortgage Costs Explained
Understanding all the costs involved in remortgaging is essential for calculating your true savings. The remortgage calculator factors in these common fees:
| Fee Type | Typical Cost | Notes |
|---|---|---|
| Arrangement Fee | £0 - £2,000 | Can be added to loan but you'll pay interest on it |
| Valuation Fee | £0 - £500 | Often free with remortgage deals |
| Legal Fees | £0 - £1,000 | Many lenders offer free conveyancing |
| Early Repayment Charge | 1-5% of balance | Only if still in a fixed/tracker period |
| Exit Fee | £50 - £300 | Charged by your current lender to close the account |
The Money and Pensions Service recommends comparing the total cost of deals including all fees, not just the interest rate. A lower rate with high fees might cost more overall than a slightly higher rate with no fees.
Top Tips for Remortgaging
1. Start Early
Begin your remortgage search 3-6 months before your deal ends. You can lock in rates in advance and take your time comparing options.
2. Check Your Credit Score
Review your credit report before applying. Fix any errors and avoid new credit applications in the months before remortgaging.
3. Calculate the Total Cost
Don't just look at the rate. Use this calculator to factor in all fees and see your true savings over the deal period.
4. Consider a Broker
Mortgage brokers can access exclusive deals and handle the paperwork. Many are fee-free as they're paid by lenders.
5. Don't Forget Product Transfers
Ask your current lender about switching products. It's often faster and may not require a new affordability assessment.
6. Think About Overpayments
If you can afford it, consider if making overpayments would save you more than a lower rate. Use our overpayment calculator to compare.
Frequently Asked Questions About Remortgaging
When is the best time to remortgage?
The best time to remortgage is typically 3-6 months before your current fixed rate ends. This gives you time to find the best deal and complete the process before you move to your lender's Standard Variable Rate (SVR), which is usually much higher.
What fees are involved in remortgaging?
Common remortgage fees include: arrangement fee (£0-2,000), valuation fee (£0-500), legal fees (£0-1,000), and potentially an early repayment charge if you're still in a fixed term. Many lenders offer free valuations and legal work to attract customers.
Can I remortgage with the same lender?
Yes, this is called a 'product transfer' and is often simpler and faster than switching lenders. However, you may get better rates by shopping around. Product transfers typically don't require a new valuation or full affordability assessment.
How much equity do I need to remortgage?
Most lenders require at least 5-10% equity in your property. However, the best rates are typically available at 60% LTV (40% equity) or lower. If your property value has increased since you bought, you may have more equity than you think.
Will remortgaging affect my credit score?
Applying for a remortgage will involve a credit check, which may temporarily lower your score by a few points. However, if you're accepted and make payments on time, the long-term impact is minimal. Avoid multiple applications to different lenders.
Can I release equity when remortgaging?
Yes, remortgaging is a common way to release equity from your home. You can borrow more than your current balance (subject to affordability) and use the extra funds for home improvements, debt consolidation, or other purposes.
Related Mortgage Tools & Resources
Summary
The remortgage calculator is an essential tool for UK homeowners considering switching their mortgage deal. By factoring in all costs including arrangement fees, legal fees, and early repayment charges, you can see your true potential savings and calculate exactly when you'll break even. Remember to start looking 3-6 months before your current deal ends, and compare both the interest rate and total fees when evaluating options. For personalised guidance, consider consulting with a FCA-registered mortgage broker who can access exclusive deals and handle the remortgage process for you.