If you’re hoping to remortgage, then affordability is likely to be your first priority. Our remortgage calculator can show you what your new repayments are likely to be if you plan to release the equity in your home. Here, you'll find out how remortgages are calculated, which factors impact your affordability and additional borrowing limits, and how to make the best use of our calculator, which you can find below...
What is a remortgage calculator?
Remortgage calculators take into account that remortgage funds typically include additional borrowing, by combining your outstanding balance with any extra borrowing to form your new total mortgage debt.
They then calculate your current Loan-to-Value (LTV) ratio by dividing the new total mortgage debt by your current property value. Finally, they apply the interest rate to the total loan amount over your specified term to give a new monthly repayment figure.
How does this calculator work?
You can use our specially designed calculator below to work out how much your new mortgage deal will cost you each month. While this is predominantly intended to show you how additional borrowing would impact your monthly repayments, you can also use it to see how much impact different interest rates would have on your existing loan repayments by simply leaving the ‘additional borrowing’ field blank.
With this calculator, you can also switch your repayment type to interest-only to see how this would impact your affordability. However, if you’re looking to remortgage a buy-to-let property, you may find our specific buy-to-let calculator more helpful.
To calculate your new repayments
To ensure you receive the most accurate result possible, you’ll need to input your:
-
Current property value - If estimating look at similar recent property sales in your area
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Current mortgage balance - This can be found on your most recent mortgage statement
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Additional borrowing (release of equity) - Input how much you would like to borrow. Please note: our calculator will flag up a warning if your requested new loan amount is above the maximum loan amount typically available at your current LTV. Specialist lenders may be able to lend more, so speak to one of our advisers if you get this result
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Interest rate - You can compare current lenders' rates here to see an example of typical remortgage interest rates
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Mortgage term - You can often extend your mortgage term when remortgaging, but keep in mind that most lenders have a maximum age of around 75-85 at the end of the loan term
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Mortgage type - This will typically be capital repayment, however to see how much an interest-only mortgage would impact your affordability you can also select an interest-only remortgage option.
How accurate are the results?
Remortgage calculators are a helpful guide to gauge how much extra you may be able to borrow with your current level of equity, or what your new monthly repayments would be after remortgaging. However, you won't find any calculators online that can work out the affordability of a remortgage with 100% accuracy.
This is because there are so many factors to take on board when working out whether a lender will accept your application and how much they will lend you. For example, this calulator bases loan size purely on your LTV. But lenders will also consider your credit history, personal income, property type and the purpose of your additional borrowing before making a final decision on how much extra you can borrow.
Individual lender criteria also varies frome one to the next, meaning one lender may be willing to offer you significantly more than another. This is why we recommend speaking to a specialist mortgage broker like ourselves, who can provide bespoke calculations based on your specific circumstances.
See What Your Equity Could Do For You
Example Calculations
When it comes to remortgaging, timing is everything. Which is why it’s a good idea to keep an eye on local property values when you’re beginning to think about switching deals, particularly if you’re looking to utilise your equity to extend your borrowing. You could also get a property valuation for greater accuracy, some estate agents offer this service for free.
A sudden boom in property value or fall in interest rates could have a big impact on how much equity you could release, and how much your remortgage will cost you. The example calculations below give you an idea of how different factors can impact your ideal remortgage opportunity:
How property value influences the amount you could borrow
The table below shows Loan-to-Value for different property prices, based on an outstanding mortgage debt of £150,000, and the maximum loan you could borrow where this equals 80% and 90% LTV, as all lenders have different maximum LTV limits for remortgage deals
|
Property Value |
LTV on £150k balance |
Max Loan (at 80% LTV) |
Max Loan (at 90% LTV) |
|
£180,000 |
83.3% |
£144,000 |
£162,000 |
|
£200,000 |
75.0% |
£160,000 |
£180,000 |
|
£220,000 |
68.2% |
£176,000 |
£198,000 |
|
£240,000 |
62.5% |
£192,000 |
£216,000 |
|
£260,000 |
57.7% |
£208,000 |
£234,000 |
|
£280,000 |
53.6% |
£224,000 |
£252,000 |
|
£300,000 |
50.0% |
£240,000 |
£270,000 |
How interest rates impact your repayments
To illustrate the impact of different interest rates, the table below calculates the monthly repayments for a total loan of £250,000 on a 25-year repayment term at 75% LTV. The interest rates used represent current average UK interest rates for 75% LTV remortgages. Ranging from best buy to less competitive deals.
|
Interest Rate (%) |
Monthly Repayment |
Total Interest (25 Years) |
|
3.5% |
£1,251.56 |
£125,468 |
|
4.0% |
£1,319.59 |
£145,878 |
|
4.5% |
£1,389.58 |
£166,874 |
|
5.0% |
£1,461.48 |
£188,443 |
|
5.5% |
£1,535.22 |
£210,566 |
|
6.0% |
£1,610.75 |
£233,226 |
|
6.5% |
£1,688.02 |
£256,405 |
Capital repayment vs. Interest-only remortgage
The table below assumes a 4.5% interest rate and a 25-year term.
|
Total Loan Amount (including any additional borrowing) |
Capital Repayment |
Interest-Only |
Monthly Difference |
|
£150,000 |
£833.75 |
£562.50 |
£271.25 |
|
£200,000 |
£1,111.66 |
£750.00 |
£361.66 |
|
£250,000 |
£1,389.58 |
£937.50 |
£452.08 |
|
£300,000 |
£1,667.50 |
£1,125.00 |
£542.50 |
|
£350,000 |
£1,945.41 |
£1,312.50 |
£632.91 |
|
£400,000 |
£2,223.33 |
£1,500.00 |
£723.33 |
|
£450,000 |
£2,501.24 |
£1,687.50 |
£813.74 |
Top tip: Remember, with interest only mortgage you’ll still owe the full outstanding balance at the end of the term. While you pay less per month, you also pay substantially more interest over the duration of the deal with interest-only
Speak to a remortgage specialist today
Our remortgage calculator is a great starting point for initial number crunching or to check your LTV band. However, speaking to a mortgage broker is highly recommended if you are applying for a remortgage, especially if you are looking to remortgage to release equity or have had credit issues.
At Money Helpdesk our experts can provide you with a bespoke calculation and go through all of the options available to you. With access to the whole market, they can help you find the ideal lender, rate and deal for your remortgage.
Get started with your remortgage plans and take advantage of a free, no-obligation chat with a broker who specialises in this area.
FAQs
No. Our remortgage calculator will work just fine for properties situated in Scotland or Northern Ireland. Remortgages are available in these territories and the way the repayments on them are calculated is generally the same across the UK.