ReMortgage Calculator

Remortgage Calculator

Remortgaging can be a great way to save money on your mortgage payments, but it can be a time consuming, confusing process. 

One of the easiest ways to get an idea of the benefits of remortgaging is by using a remortgage calculator.  

Let’s find out more about remortgage calculators and how they can help you save on your mortgage. 

Remortgage Calculator Key Takeaways 

1. Remortgage calculators compare costs and potential savings of remortgaging by using key parts of your current mortgage and comparing it to what’s on the market right now 

2. They estimate monthly repayments and savings for your entire mortgage term to help compare mortgages and plan your budget 

3. You can use independent remortgage calculators to compare deals across the market for the best remortgage deal quickly. 

4. Remortgage calculators provide estimates only, and the actual costs may differ based on lender checks, credit scores, and surveys. 

5. To use remortgage calculators effectively, you need to be accurate with your inputs, compare multiple lenders, consider the whole cost of the mortgage, include fees and charges, and seek independent advice if you’re unsure. 

What is a remortgage calculator? 

A remortgage calculator is a useful tool that helps you calculate the costs and potential savings of remortgaging your home.  

You enter key information such as your current mortgage balance, the amount of time left on your mortgage and your current mortgage payments to find out what your alternatives would be if you were to remortgage. 

Remortgage calculators are a quick and easy way to compare your current mortgage to the remortgage options available.  

Using an independent remortgage calculator will give you mortgage rates and products from across the market, whereas if you use your current lender’s remortgage calculator or another bank’s remortgage calculator, your options will be limited to their mortgage products. 

Therefore to get the best remortgage deal use an independent remortgage calculator to compare interest rates from the whole market. 

How do remortgage calculators work? 

Remortgage calculators work by looking at the various factors that affect the cost of your mortgage, such as your current mortgage balance,  property value, current interest rate and interest rates for your potential new mortgage. 

You can then compare the cost of your current mortgage with the cost of a new mortgage, showing you the differences in monthly repayments and total costs. 

When using a remortgage calculator, it is important to remember that the results are only estimates. 

The actual cost savings and monthly payments may vary based on the specific terms of your mortgage deal and other factors. 

Also, you can use a remortgage calculator to not only compare interest rates on a remortgage, but the length of your mortgage term.  

For example, how much it would cost overall to increase your mortgage term whilst moving to a lower interest rate product (you’d be paying interest for longer, but at a lower rate). 

Example Remortgage Calculator Calculations 

Here is an example remortgage calculation using mortgage rates from a UK mortgage provider. Please note that these rates are for illustrative purposes only and may not reflect current rates. 

In this example, remortgaging your home from Bank A to Bank B would result in a lower interest rate (4.0% to 2.5%) and therefore reduced monthly mortgage payment (£907.09 to £792.95).  

This demonstrates how a lower interest rate can save you money on your mortgage over time.  

Over the 20-year mortgage term, the total cost of the mortgage would decrease from £217,701.60 to £190,308.00, resulting in a total saving of £27,393.60. 

If you’re looking to reduce your mortgage term or enjoy bigger savings over the long term, here is an example remortgage calculation where the mortgage term was reduced by 5 years during the remortgage. 

In this example, remortgaging from Bank A to Bank B would result in a lower interest rate (4.0% to 2.5%) and a reduced mortgage term (20 years to 15 years).  

The monthly mortgage payment would increase from £907.09 to £1,000.51 due to the shorter term.  

However, the total cost of the mortgage would decrease from £217,701.60 to £180,091.80, resulting in a total saving of £37,609.80 over the 15-year mortgage term. 

Note that these are example figures only. 

Pros of Remortgage Calculators  

There are lots of pros to doing a calculation with a remortgage calculator.  

• Estimate how much you could save by switching your mortgage, whether this is monthly repayments or savings across the overall mortgage term.  

• You can use the information provided as a baseline for comparing mortgage products and your options when it comes to remortgaging 

• Compare deals across the market in a quick and easy way  

• Helps plan your budget  

Cons of Remortgage Calculators  

When using a remortgage calculator, there are some cons and limitations to consider. 

• Not 100% accurate 

• A remortgage calculator calculation is not a guarantee you would be offered a particular mortgage product, even if you think it’s affordable.  

• Actual costs may differ based on lender affordability checks, credit scores and surveys. 

• There are limitations to the calculation options, for example some remortgage calculators may not factor in some of the fees associated with the remortgage.  

Tips for using remortgage calculators  

To get the most out of using a remortgage calculator here are a few tips to keep in mind when doing your calculations.  

Be accurate with your input 

Don’t guesstimate when inputting your current mortgage details. Using the incorrect remaining mortgage term date by a year or two can ultimately affect the figures massively.  

Compare multiple lenders 

When comparing options, look at mortgage products from various lenders. This gives you the opportunity to find the most cost-effective option to get the best deal.  

Compare the total cost of the mortgage 

When comparing mortgage deals consider the whole cost of your mortgage vs. new options rather than just the monthly repayments. Even if a mortgage looks like it’s cheaper monthly, a longer remortgage term would end up being more expensive overall. 

Include fees and charges 

When calculating your costs factor in all the mortgage fees and charges that would be included. These include fees to exit your current mortgage and any fees required to arrange your new mortgage. 

Get independent advice  

While remortgage calculators can be a useful tool to give you an idea of expected costs, they aren’t 100% accurate. As a result, you should always consider independent mortgage advice before making any decisions.  

FAQs 

Are remortgage calculator results accurate? 

The results of a remortgage calculator are only estimates and may vary based on the specific terms of the mortgage deal and other factors. It is important to keep in mind that the calculator cannot predict future interest rate changes or other market fluctuations that may affect the cost of your mortgage. 

How can a remortgage calculator help me? 

A remortgage calculator can help you estimate the potential cost savings when switching to a new mortgage deal, compare multiple mortgage deals side by side, and plan your budget effectively. 

Do I need to use a remortgage calculator? 

While it is not necessary to use a remortgage calculator, it can be a useful tool in helping you understand the potential cost savings and estimated monthly payments associated with switching to a new mortgage deal. 

Can a remortgage calculator tell me if I should remortgage? 

No, a remortgage calculator cannot tell you whether or not you should remortgage. It can only provide estimates of potential cost savings and monthly payments associated with switching to a new mortgage deal. It is important to speak to a mortgage advisor before making a decision about remortgaging. 

Can I use a remortgage calculator for a shared ownership property? 

Yes, you can use a remortgage calculator for shared ownership. However, it is important to note that shared ownership mortgages can be more complex than standard mortgages, so it is recommended to consult with a financial advisor or mortgage specialist for advice and bear in mind all results from the calculator are estimates. 

Can I use a remortgage calculator if I have an interest-only mortgage? 

Yes, you can use a remortgage calculator if you have an interest-only mortgage. However, you will need to provide information about the interest rate and term of your current mortgage, as well as the interest rate and term of the new mortgage deal.