Remortgage Calculator Money Saving Expert
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Reviewed by Calculator Editorial Team
Remortgaging can save you thousands of pounds over the life of your mortgage. Our remortgage calculator helps you compare different mortgage deals to find the best option for your situation. By analyzing your current mortgage, interest rates, and potential new deals, you can make an informed decision about whether remortgaging is right for you.
How the Remortgage Calculator Works
Our remortgage calculator is designed to help you estimate your potential savings when considering a new mortgage deal. The calculator takes into account your current mortgage balance, interest rate, term, and any fees associated with remortgaging. It then compares these figures with the new mortgage offer you're considering to provide an estimate of your potential savings.
This calculator provides an estimate based on the information you provide. Actual savings may vary depending on your individual circumstances and the terms of the new mortgage deal.
Key Features
- Compare current mortgage details with new mortgage offers
- Calculate potential savings over the life of the mortgage
- Analyze the impact of different interest rates and terms
- Estimate the cost of remortgaging including fees
- Visualize savings with an interactive chart
How to Use the Calculator
- Enter your current mortgage details including balance, interest rate, and term
- Input the details of the new mortgage offer you're considering
- Specify any fees associated with remortgaging
- Click "Calculate" to see your potential savings
- Review the results and chart to make an informed decision
Key Formulas Used
The remortgage calculator uses several key formulas to estimate your potential savings:
Monthly Payment Calculation
For both your current and new mortgage, the calculator uses the standard mortgage payment formula:
M = P [ i(1 + i)n ] / [ (1 + i)n - 1 ]
Where:
- M = Monthly payment
- P = Principal loan amount
- i = Monthly interest rate (annual rate divided by 12)
- n = Number of payments (loan term in months)
Total Interest Paid
The calculator calculates the total interest paid over the life of the mortgage by multiplying the monthly payment by the number of payments and subtracting the principal loan amount.
Potential Savings
The calculator estimates potential savings by comparing the total interest paid under your current mortgage with the total interest that would be paid under the new mortgage, minus any remortgage fees.
These formulas help you understand the financial impact of remortgaging and make an informed decision about whether to proceed.
Example Calculation
Let's look at an example to illustrate how the remortgage calculator works. Suppose you have a current mortgage with the following details:
| Current Mortgage Details | Value |
|---|---|
| Loan Amount | £200,000 |
| Interest Rate | 4.5% |
| Loan Term | 25 years |
| Monthly Payment | £1,000.00 |
| Total Interest Paid | £240,000.00 |
You're considering a new mortgage offer with the following details:
| New Mortgage Details | Value |
|---|---|
| Interest Rate | 3.5% |
| Loan Term | 25 years |
| Monthly Payment | £900.00 |
| Total Interest Paid | £210,000.00 |
| Remortgage Fees | £1,500.00 |
Using the remortgage calculator, you can estimate your potential savings as follows:
Potential Savings Calculation
Total interest saved = Current total interest - New total interest + Remortgage fees
Total interest saved = £240,000 - £210,000 + £1,500 = £31,500
This example shows that remortgaging to a lower interest rate could save you £31,500 over the life of your mortgage, minus the remortgage fees.
When to Remortgage
Remortgaging can be a smart financial move if you're in a good position to do so. Here are some common scenarios where remortgaging might be beneficial:
Lower Interest Rates
If interest rates have fallen significantly since you took out your current mortgage, remortgaging could save you thousands of pounds in interest payments over the life of your loan.
Debt Consolidation
If you have multiple high-interest debts, remortgaging could allow you to consolidate them into a single lower-interest mortgage, potentially saving you money in the long run.
Life Changes
Major life events such as marriage, having children, or buying a new home may make you eligible for better mortgage rates or terms.
Early Repayment
If you have extra funds available, remortgaging could allow you to pay off part of your mortgage early, reducing the amount of interest you pay over time.
Before remortgaging, it's important to consider the costs involved, such as valuation fees, legal fees, and remortgage fees. Make sure you understand all the implications before proceeding.
Common Mistakes to Avoid
While remortgaging can save you money, there are several common mistakes that borrowers make. Being aware of these can help you avoid unnecessary costs and potential problems:
Ignoring Fees
Many borrowers focus only on the interest rate when comparing mortgage deals, but they should also consider the fees associated with remortgaging. These can include valuation fees, legal fees, and remortgage fees, which can add up to hundreds or even thousands of pounds.
Not Shopping Around
It's important to compare multiple mortgage deals from different lenders to ensure you're getting the best possible rate. Don't settle for the first offer you receive.
Overborrowing
When remortgaging, it's easy to be tempted to borrow more than you need. However, this can lead to higher monthly payments and more interest being paid over the life of the loan. Stick to your budget and only borrow what you need.
Not Considering the Long Term
While remortgaging can save you money in the short term, it's important to consider the long-term implications. A lower interest rate today may not be available in the future, so make sure your decision aligns with your long-term financial goals.
Ignoring Your Credit Score
Your credit score can affect the mortgage rates you're offered. Before remortgaging, check your credit report and take steps to improve your score if necessary.
Frequently Asked Questions
How much can I save by remortgaging?
The amount you can save by remortgaging depends on several factors, including your current mortgage details, the new mortgage offer, and any fees associated with remortgaging. Our calculator provides an estimate based on the information you provide.
What fees are involved in remortgaging?
Common fees associated with remortgaging include valuation fees, legal fees, and remortgage fees. These can vary depending on the lender and your individual circumstances. It's important to factor these costs into your decision.
How long does the remortgage process take?
The remortgage process typically takes between 4 to 8 weeks, depending on the lender and your individual circumstances. This includes time for valuation, legal work, and processing your new mortgage.
Can I remortgage if I have bad credit?
It's possible to remortgage with bad credit, but you may be offered higher interest rates or less favorable terms. It's important to shop around and compare multiple mortgage deals to find the best option for your situation.
What happens to my current mortgage if I remortgage?
When you remortgage, your current mortgage is paid off, and you take out a new mortgage with the new lender. The new mortgage will have its own terms and conditions, so make sure you understand them before proceeding.