Remortgage Calculator United Kingdom
This remortgage calculator shows how much you could save each month and year by switching to a lower rate, net of product and exit fees in year one.
What it does
The Remortgage Calculator shows how much you could save each month and each year by switching your mortgage to a lower interest rate, and what that saving is worth in the first year once product and exit fees are deducted.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Payment = balance × i ÷ (1 − (1 + i)^−n), where i is the monthly rate; monthly saving = current payment − new payment; net year-one saving = annual saving − fees
How it works
It works out the monthly payment on your outstanding balance over your remaining term at your current rate and at the new rate using the standard amortising-mortgage formula, then takes the difference as your monthly saving, multiplies it by twelve for the annual saving, and subtracts any fees to give the net saving in year one.
Where it is used
- Deciding whether to remortgage when your fixed deal ends
- Checking a lower rate still pays off after product and exit fees
- Comparing switching costs against staying on the standard variable rate
Worked example
On a £180,000.00 balance over 240 months, dropping from 6.5% to 4.5% brings the payment to … — a monthly saving of … and … net in the first year after fees.
Remortgaging means moving your existing mortgage to a new deal, usually because your rate has risen or a fixed period is about to end. A new deal often carries a product fee, and leaving your current one early can trigger an early repayment charge. This remortgage calculator shows the monthly and annual saving from a lower rate next to the net benefit once those first-year costs are deducted.
How the calculator works
The tool uses the standard repayment mortgage formula. It spreads your outstanding balance over the remaining term in months and applies the monthly interest rate to find the level payment that clears the debt on schedule. It does this at your current rate and at the rate you are considering, and reports the new payment and the difference. That difference is your monthly saving, twelve times it is the annual saving, and the annual saving minus the fees you enter is the net saving in the first year. Every input is your own figure, so the result reflects your assumptions and updates when you change them.
Why the remaining term matters
Two borrowers with the same balance and the same rate cut can see different savings if their terms differ. Over a longer remaining term more of each payment is interest, so the same rate cut saves more each month. On £180,000 a cut from 6.5% to 4.5% saves about £178 a month over 10 years, £203 over 20 years and £226 over 30 years. When you remortgage you can often reset the term as well as the rate, so try a few term lengths to see how the monthly payment responds, remembering that a longer term also means paying interest for longer.
Counting the true cost of switching
A remortgage can involve a product or arrangement fee, a valuation fee, legal costs and, if you leave your current deal before it ends, an early repayment charge that is often a percentage of the balance. All of these belong in the fees box. The calculator subtracts the total from your annual saving to give the net first-year figure, the number that shows whether switching now makes sense. A lower rate with a high fee can be worse in year one than a slightly higher rate with no fee, and the net figure shows that comparison.
A worked example
Suppose you owe £180,000 with 240 months left, currently at 6.5%, and you are offered 4.5% with £1,000 of combined product and exit fees. At 6.5% the monthly payment is about £1,342.03; at 4.5% it falls to about £1,138.77, a monthly saving of about £203.26, or £2,439.15 over the year. Take off the £1,000 of fees and the net first-year saving is about £1,439.15. The fee is a one-off, so later years keep the full annual saving while the rate lasts.
Fixed rates ending and the standard variable rate
The most common reason to remortgage is a fixed or discounted period ending. Most lenders then move you onto their standard variable rate, which is typically much higher than the deals offered to new customers, and the gap between that rate and a new fixed deal is often where the biggest saving sits. Many lenders let you agree a new rate up to six months in advance, so run the numbers well before your current deal expires.
Assumptions and limitations
This is a planning estimate, not a mortgage offer. It assumes a repayment (capital and interest) mortgage with a level payment over the remaining term and a rate that stays the same for the comparison. It does not model interest-only mortgages, offset accounts, rate changes partway through or borrowing extra when you remortgage. The fees figure is whatever you enter, so the net first-year saving is only as accurate as those costs, including any early repayment charge on your existing deal. Confirm the rate, fees and charges with the lender or a qualified mortgage adviser before committing.
About This Remortgage Calculator
Use this remortgage calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
What does a remortgage calculator do?
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Does this calculator include early repayment charges?
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