Remortgage Calculator

Remortgaging is when you switch your existing mortgage for a new one. You can switch either with your current lender or with a new one. It’s when you’re not moving home, just changing to a new mortgage agreement by using your existing property as security for the new loan.

Because there’re so many different reasons you might want to remortgage and many factors that will affect whether or not it’s a good idea, it’s always worth working with a specialist mortgage broker who can advise you.

There are often fees to consider when you remortgage, so an advisor can help you work out if the costs outweigh the savings in your case.

It’s really common to remortgage instead of staying on a mortgage for its full term. Mortgages generally last around 25-30 years, in which time a lot can happen in your life, and a lot can happen that affects the financial market.

Whether or not you choose to remortgage depends on a few things like if you’re still tied to your current mortgage, your financial and personal circumstances. However, generally, it’s a good time to remortgage currently because interest rates are at an all-time low.

The Bank of England cut its base interest rate to 0.1% because of the coronavirus pandemic. That’s the rate they charge banks and lenders when they borrow money. The low base interest rate means borrowing prices are therefore lower than usual because the base rate influences the rates that most lenders charge their customers.

People rarely stick to the length of their mortgage terms which are usually 25 or 30 years. In 25 years, your life could change a lot considerably and you might look for a new deal to suit your situation. Because of the economic effects of the pandemic, it could be a good time to remortgage as interest rates are lower than usual.

Our Mortgage Experts can advise the right options for you.

Remortgaging can save you money in loads of different ways, and it’s one of the main reasons people choose to remortgage. Here’s a few ways it can save you money:

1. Sometimes your property value will increase. This can mean your loan-to-value rate changes and you could be eligible for a better rate and therefore save money.

2. A lot of mortgages can last a short time, for example two to five years. Remortgaging after this time allows you to move to another good short-term deal.

3. You could move to a better rate. If you spot a mortgage with a better rate, always make sure the savings will still be worth it after you pay your exit fee for leaving your current mortgage early.

Here’s a list of common reasons why people choose to remortgage:

1. Debt consolidation
   If you’re a homeowner with multiple debts that you’re struggling with, debt consolidation might be a tempting option. You can get money through using your home as security to clear all your debts and this can be achieved through remortgaging. 

2. A change in your financial situation
   A lot of people are experiencing a change in their finances because of a global recession brought on by the global coronavirus pandemic. If you’re unable to keep up with your mortgage repayments because you’ve lost your income, been ill, or any other reason, then you might find it hard to keep up with your current mortgage repayments. Sometimes, remortgaging can help you get a better deal and cheaper repayments that suit your current financial situation.

3. To get a better mortgage rate
   You might want to remortgage to get a better interest rate, and now is the perfect time with the Bank of England setting their base interest rate at an all-time low of 0.1%. Remortgaging now could get you a better deal and leave you with more money to spend and save for other things. Use our remortgage calculator to find out how much you could save. Or, speak to one of our remortgaging experts by making an enquiry. 

4.  You need to borrow more money
   There may be times in life when you’ll need extra money. You might want to carry out some home improvements. Remortgaging can help you generate extra money especially if you remortgage with cheaper interest rates this time around. Expect your mortgage lender to ask you about how you plan on spending the money they’ll lend to you. You’ll usually be accepted if your reasoning is wanting to undertake home improvements or a new car.

5. Your home is worth more now
   Property prices tend to go up and down, and this could mean that since you took out your original mortgage you could be in a lower loan-to-value (LTV) band. If you decide to remortgage in these circumstances then you can be eligible for much lower rates which will give you some extra money to spend and save.

Remortgaging is essentially moving to a new mortgage. Remortgaging works by paying off one mortgage with the money you’ve made from a new mortgage using the same property to secure the loan. You can move mortgages with your current mortgage lender or with a new one. 

Remortgaging isn't moving home, it’s just changing to a new mortgage agreement. Read our Complete Guide to Remortgaging to see what's involved.

To qualify for a remortgage, lenders will assess certain factors. Lenders will look at how much you still owe and closely analyse your debt-to-income ratio. Read more about debt-to-income in our Guide: How does your debt-to-income ratio affect your credit score?

Lenders will also look at loan-to-value (LTV) ratios. Most lenders are looking for borrowers with less than 80% loan to value ratio to remortgage. As always there will be lenders who can make exceptions.

Mortgage lenders will also look at your credit score. If you have credit issues, or have done in the past, it’s still possible to remortgage. We specialise in bad credit mortgages, and have a network of specialist bad credit mortgage brokers who can help. They’re experienced at getting mortgages for people with bad credit. 

Get in touch with us if you want to remortgage, or read our full Bad Credit Remortgage Guide for more info.

With the Bank of England’s base interest rate at an all-time low of 0.1%, now could be a good time to remortgage. Low-interest rates allow homeowners to reduce costs or make overpayments to pay their mortgage off quicker.

Generally, a good time to remortgage is when your current mortgage term ends. If you want to leave your current mortgage early, make sure you check the terms and conditions of paying off and ending your mortgage early, especially in terms of the offer period.

It’s a good idea to begin remortgaging around two months before your deal is about to end, so you can time it correctly that your new deal begins on time.

It usually takes around 4-8 weeks to remortgage. The remortgaging process could be as quick as one week if your mortgage broker, bank and solicitor are aware of the remortgage completion date.

Yes, there are additional fees when it comes to remortgaging. This is a list of all possible fees associated with remortgaging. Whether or not you’ll be asked to pay these fees depends on the lender. Each lender has different remortgaging fees. It also depends on whether or not you’re staying with your current lender, or moving to a new one. Generally, there’ll be less fees if you stay with your existing lender. 

Remortgaging fees:

Early repayment charge 

Who do you pay this to? Your existing lender

How much do you pay? It’s usually a maximum of around 5% of your mortgage. The percentage is highest the earlier in the mortgage term you want to leave. The percentage gets less the longer you’ve had the mortgage. 

An early repayment charge is a penalty applied when you repay your mortgage during the tie-in period. The early repayment charge also applies if you overpay more than is allowed. This is usually the length of time you are on an initial deal e.g fixed for three years.

You are essentially being penalised for breaking the mortgage deal early so the lender uses the fee to recoup some of the interest they’ve lost. The early payment charge is usually a percentage of the outstanding mortgage debt. The charge usually reduces the longer you stay with it.

Make sure you’ve done your calculations properly if you intend to pay it. You would need a remortgage deal that has a lower monthly payment than your current one, so it’s worth the one you’re leaving.

If you do end up paying an early repayment charge, you can decide whether to pay the mortgage lender you’re leaving or increase the mortgage amount you’re applying for from the new lender to cover the charge. Remember, increasing the loan size to cover the cost of this charge can increase your loan-to-value ratio and will put you in a more expensive LTV band. 

How to avoid an early repayment fee

If you don’t want to pay this fee, then make sure your mortgage completes after your current tie-in period ends. This is usually when your mortgage incentive period ends e.g the end of a two year fixed rate. It’s really costly to get this wrong, so make sure your solicitor is briefed properly to get the date right too.

Deeds release fee 

Who do you pay this to? Your existing lender

How much do you pay? £0-£300

Deeds release fee is sometimes known as an ‘admin charge’. This fee is to pay your existing lender to forward on your title deeds to your solicitor. You don’t pay interest on this fee, so it's a good idea to pay it when you leave your mortgage as the figure doesn't change. You don’t always have to pay this fee as not all lenders charge them.

Mortgage fees and Arrangement fees

Who do you pay it to? Your new lender

How much do you pay? At least up £1,000 but can cost £2,000+

You will probably have at least one mortgage fee, and maybe even two. These fees are the mortgage booking fees and mortgage arrangement fees. The expensive fee that lenders will charge you for is the arrangement fee. The arrangement fee covers the overall cost of a mortgage, along with the interest rate.

Booking fee

Who do you pay it to? Your new lender

How much do you pay? £100-£200

Some lenders charge a mortgage booking fee to secure a fixed-rate, tracker or discount deal. The booking fee is also known as an application fee or a reservation fee. You’ll need to pay this fee as soon as you submit your mortgage application. The fee is non-refundable.

Valuation fee

Who do you pay it to?  Your new lender

How much does it cost? £300-£400

Most remortgage packages give this for free, but some don’t and you will have to pay.

Mortgage lenders will need a valuation for their security, so they know that if things don’t work out and you fail to repay they can repossess your property and get an amount for it when it’s sold. You pay the valuation fee when you apply.

Conveyancing fee

Who do you pay? Your solicitor

How much do you pay? Usually around £300

You will need a solicitor when you’re remortgaging. That’s because there’s legal legwork needed to remove the original lender’s interest from the property and to register it to the new mortgage lender. Most remortgages include a free legal package and that means the lender will choose the solicitor. 

Mortgage broker fee

Who do you pay? The broker

How much do you pay? Depends on the broker

If you’re using a mortgage broker, then they might charge you a fee. Some brokers are free. Fees can cost anything from a fixed fee of £495 to 1% of the loan amount. What you pay the lender also depends on if the broker is going to keep the commission they get from the lender. You might have to pay upfront, it really depends on the broker.

If you’re looking for the most competitive remortgage deals, then it’s a good idea to get the help of a qualified mortgage broker. They have access to more lenders than you do as a borrower because a lot of mortgage lenders are actually only available through intermediaries. 

And you’re in the right place to find one! We’re  specialist mortgage brokers who makeing mortgages possible for people in complex situations. 

Get in touch with us and find out what we can do for you and check out our Remortgage Page to see what we offer.

How much you can borrow depends on what your financial circumstances are. Your income will play an important part and how much you can borrow is also dependent on how much lenders are willing to lend you. Lenders will check if you can afford to repay the loan and that your finances can handle this. Your loan-to-value (LTV) ratio and the value of your property will also be looked at. The lower the percentage then usually the better deal you’ll be able to get. 

Your LTV can be affected if you have bad credit. Read this Guide for more info: How does Bad Credit affect Loan-to-Value (LTV)? 

Most lenders will let you remortgage after 6 months. The majority of lenders will let you remortgage 6 months after your name is registered on the title deeds. As always, there are some lenders who will let you remortgage before then.  Lenders who will let you remortgage before 6 months, will need for  you to be registered as the owner at the Land Registry. There will also be some lenders who are happy to allow you to remortgage before you’re on the title deeds.

Yes, you can and this is called ‘additional borrowing’ and this is when you borrow more money and increase the overall size of your mortgage. You can use additional borrowing to pay for:

• Property purchase

• Car purchase

• Home improvements

• School fees