Remortgage Calculator

The decision homeowners make every 2-5 years

Mortgages typically fix rates for 2, 5, or 10 years. When the fixed period ends, your deal reverts to the lender's Standard Variable Rate (SVR) — usually 2-4 percentage points higher than your fixed rate. Remortgaging means switching to a new fixed deal (with your current lender or a different one) to avoid the SVR jump. This is one of the most consequential recurring financial decisions in homeownership, often worth tens of thousands across the life of the mortgage. The calculator above compares your options; the commentary below is about what to actually do with the comparison.

The SVR trap and why it exists

Lenders love SVR customers. When your 2-year fix ends, the default is the lender's SVR — which might be 2-4 percentage points above current market rates for a comparable new fix. Take a 200,000 mortgage — the figures in these examples are illustrative, so read them in whatever currency you set above. At an SVR of 7.5% versus a new fix at 4.5%, that is roughly 350 more per month, about 4,200 a year. Multiply across millions of borrowers, and SVR becomes highly profitable for lenders — and correspondingly expensive for borrowers who don't actively remortgage. Borrowers who remain on SVR typically pay more than those who switch to a new fix. The lender benefits from inertia; remortgaging is what ends it.

The 3-month remortgage window

You can typically apply for a remortgage 3-6 months before your current fix ends. Rate offers from most lenders are valid for 3-6 months, so applying early locks in a rate without triggering an immediate switch. This is particularly valuable when rates are expected to move: you lock in at the current rate and if rates drop before your new deal starts, you can usually switch to a better product then; if rates rise, you're protected by the rate you locked. Not applying until the last moment means accepting whatever rate is available at that precise point, which is worse regardless of direction.

The cost structure of remortgaging

Remortgage costs vary substantially. The figures below are illustrative typical ranges and vary by lender, product, and local market:

Arrangement fee: 0-2,000. Some products offer fee-free alternatives with slightly higher rates — worth comparing total cost over the deal period.

Valuation fee: 200-500, sometimes free as a product benefit.

Legal fees: 200-500 for straightforward remortgages, sometimes free on certain products. Higher if switching lender or with complex circumstances.

Early repayment charge on existing deal: Only applies if remortgaging before the fixed period ends. Typically 1-5% of outstanding balance. Usually prohibitive to pay unless you're definitely saving enough to justify.

Mortgage broker fee: 300-700 if using a fee-charging broker. Many brokers are fee-free (earning commission from lenders).

Total costs typically 500-3,000. The remortgage benefit needs to clear these within the new fixed period for the saving to outweigh the fees.

Fee vs rate trade-off

A common dilemma: product A offers 4.3% with a 1,995 arrangement fee; product B offers 4.7% with no fee. Which wins? Depends on mortgage size and deal length. On a 300,000 5-year fix: product A saves 0.4% × 300,000 × 5 ≈ 6,000 in interest over the deal period, but costs 1,995 in fee. Net saving ≈ 4,000, so A wins. On a 100,000 5-year fix: 0.4% × 100,000 × 5 ≈ 2,000 in interest saving vs 1,995 fee. Net saving ≈ 5 — essentially a wash, so B (simpler) wins. The break-even balance is around 125,000 for a 0.4% rate difference with a 1,995 fee. Below that, fee-free products usually win; above it, fee-charging lower-rate products often win.

Fixed for 2, 5, or 10 years?

The fix length is as important as the rate. Trade-offs:

2-year fix: Lowest typical rate but most frequent remortgaging (fees, hassle, rate exposure). Suits borrowers who expect rates to fall.

5-year fix: Middle ground; most popular choice. Rate typically 0.1-0.3% above 2-year but locks certainty for longer. A common middle-ground choice for borrowers in stable circumstances.

10-year fix: Rate premium of roughly 0.3-0.7% above 5-year but maximum stability. Suits borrowers who expect rates to rise or who place a high value on rate certainty. Exit flexibility is limited — early exit charges are often severe.

For most homeowners with stable circumstances, 5-year fix balances cost and certainty. The 2-year fix can outperform in specific rate environments but adds remortgaging hassle. The 10-year fix is rarely the lowest-cost choice but appeals to those who place a high value on certainty.

Switch lender or stay with current?

Staying with current lender is typically simpler (no full application process, often just a rate-switch form) but may not get the best rate. Switching lender involves a full application including credit check and valuation, but can secure better rates. As a rough guide, when the lowest external rate is around 0.2 percentage points or more below the lender's retention offer, switching often becomes worthwhile despite the admin; when the gap is smaller, many borrowers stay put. Mortgage brokers can check both at once.

The loan-to-value tier effect

Your LTV at remortgage determines available rates, and LTV has likely improved since your last remortgage (both through paying down principal and through property appreciation). Moving from 85% LTV to 75% LTV unlocks rates typically 0.3-0.7% better; from 75% to 60% LTV, often another 0.1-0.3%. These ranges vary by lender, product, and local market. Check your current LTV before remortgaging — you might qualify for better rate tiers than your last deal provided.

Remortgaging when circumstances have changed

Negative changes since last mortgage (income drop, job change, new debt) can cost approval. Positive changes (income rise, debts cleared, additional deposit available through house value gain) can secure better rates. Borrowers who've paid down debt, increased savings, or had income rise meaningfully since last remortgage may find that "enhanced multiplier" or "professional" rates become available — these are often offered on request rather than automatically.

When early exit applies

Generally, paying an early exit charge works against the borrower, because the charge usually outweighs what switching early would save. But there are narrow cases where it works: rate drops dramatically between your fixing and current environment (the gap between your rate and new deals exceeds the ERC over the fixed period remaining), circumstances changed making your current product unsuitable (moving, separation, substantial windfall), or you're selling the property anyway. The ERC amount multiplied across the remaining fixed period often exceeds the rate-gap saving, so early exit is rarely the lower-cost outcome.

What this calculator shows

The tool compares your current mortgage payment with a proposed remortgage deal, factoring in rate, fees, and deal length. It doesn't automatically model the post-fixed-period situation (SVR or next remortgage), early repayment charges, or specific lender approval criteria. The output is the comparison baseline; the other factors complete the decision.