Using a remortgage calculator (UK)
We’re going to talk about remortgaging and how a remortgage calculator works, but if you can’t wait and want to know how much you could save, CLS searches through over 30 lenders to show you a great range of potential remortgage options. Try our calculator now.
You’ll need to know:
- How many applicants are going on the mortgage
- The desired product length
- Your date of birth
- Your employment status and how long you’ve been in your current job
- Your salary or your earnings for the last three periods if you’re self-employed
- The property type and regional location
- If it’s a new build
- The property value
- How much you’re hoping to borrow
- If you need a new mortgage or are remortgaging
- Your preferred mortgage term
How a remortgage calculator works
Remortgage calculators use up-to-date interest rates (according to the latest loan-to-value ratios), the property’s current value, remaining mortgage amount, term, and existing monthly payments.
Those details will reveal a range of available options that will save you money if you’re accepted for them.
Remember, a remortgage calculator doesn’t offer guarantees or an approved offer. Your results are a selection of current deals that your figures suggest you might be approved for. There are also other obligations you must fulfil to qualify.
Reasons to remortgage your home
1. To cut costs with a better deal and save money
At the end of every fixed-term period, your mortgage defaults to the provider’s variable rate. At that point, your payments will likely increase unless you sign up for a new fixed-rate deal.
You can ask your existing provider for a new offer, or you can change to an alternative lender with preferable rates.
2. To release the equity in your home, freeing up funds
If you’ve paid a mortgage for a while, you’ll have built up equity in your home. By remortgaging, you can release that equity, or a portion of it, as a cash lump sum. There are plenty of reasons a lender will happily release cash when remortgaging; the following are some of the most likely to be accepted and most popular.
- Consolidate debts
- Home improvements including extensions, renovations, decoration, or upgrades
- Buy a car, caravan or boat
- Cover medical expenses
- Buy further shares in a shared ownership property
- Buy a second home
- Buy a holiday home
- To self-build a new home
- Buy the freehold on a property or pay for an extended lease
- Buy land
However, remortgaging isn’t always the best way to release funds. You could be better off with a personal loan or a second-charge mortgage (a further loan secured by your property). It’s worth speaking to a specialist mortgage broker to find your best options.
How much money can I release by remortgaging my property?
You can release up to 90% of the equity in your property depending on your LTV (loan to value ratio). Of course, you’ll have to prove your affordability—as you did when you first applied for the mortgage—but if all the paperwork checks out, you could achieve 4.5 times your salary.
Is remortgaging a good idea?
Yes. If you’re remortgaging to lower your payments or to pay off a chunk of your mortgage, it’s a great time to track down a better deal.
Remortgaging might seem like a task—like switching your energy, insurance, or banking providers—but it’s well worth it when a new deal can save you thousands of pounds.
To see if it’s right for you, or if now is the best time in your situation, call our experts or try out our remortgage calculator.
How much does it cost to remortgage a home?
There isn’t a flat fee when remortgaging but a range of costs from each provider in the remortgaging process. Only when you compare those costs against the savings your new interest rates provide will you know if it’s a good deal or not.
Factoring in the additional remortgaging fees
Early repayment charges
If you’re planning to exit a mortgage halfway through an existing deal or fixed-rate term, you’ll pay an ERC (early repayment charge) to cover what the provider had planned to earn from the agreement. ERC terms vary, but it could cost up to 5% of your balance.
Arrangement/product fees
Setting up a new mortgage can cost between £300 and £2,000. Each lender will have its own figures, so you must research the costs they’re going to hit you with. Those attractive lower interest rates often come with higher product fees, so they may not be quite the deal you anticipate.
Booking/reservation/application fees
Lenders charge a small non-refundable booking or reservation fee on your new mortgage application. Valuation fee
Lenders need to know what your home is worth when switching deals, especially when releasing equity. Valuations cost a few hundred pounds depending on who carries them out.
Transfer fees
Moving money around also comes with a charge—usually a small amount, of about £30.
Deeds release/completion/redemption administration/discharge fee
Again, your previous provider will charge for extra admin costs, such as releasing property deeds to another provider and moving your mortgage. Again, depending on your lender, prices can range from £50 to a few hundred.
Conveyancing costs
Then there are legal fees. Your new lender may soak these up if you allow them to use their solicitors, but it could be quicker if you pay for your own. You’ll also have more control.
Broker fees
If you remortgage through a mortgage broker, they need to make their share to pay for their service. Sometimes they’re included in the mortgage, and other times they’ll charge a flat fee. Either way, they usually save buyers or switchers far more than they cost.
Does remortgaging affect my credit score?
Too many mortgage applications over a short period can affect your credit score, so you must search out the right deal upfront—one where you’re sure to be accepted.
In some circumstances, remortgaging can help lower your credit score. For example, if you consolidate existing debts or reduce your total debt amount, you could add a few extra points to your score. It also shows lenders that you manage your money responsibly.
Narrow down your remortgage offers with CLS Money
If you’re not keen on feeding your figures into a remortgage calculator or if you’d prefer to speak to an expert, we’re ready to help. We’ll walk you through all the stages of remortgaging your property and show you just how much you can expect to save or release in your position.
