Is Switching Early Worth It?
Remortgage Costs
Remortgaging before the end of a fixed-rate period can be a smart financial move, especially if interest rates have dropped or your circumstances have changed. However, it’s important to weigh the potential savings against the costs involved. Our Early Remortgage Savings Calculator helps you determine whether switching your mortgage early is worth it by calculating how long it will take to cover the costs associated with remortgaging.
Who Might Consider Remortgaging Early?
Remortgaging early can be a great option for homeowners who find themselves in one of the following situations:
Falling Interest Rates: If current mortgage rates have dropped significantly compared to your fixed rate, remortgaging early could save you money, even after considering early repayment charges and other fees.
Improved Financial Situation: If your financial situation has improved, such as an increase in income or a reduction in debt, you may now qualify for a better mortgage deal with a lower interest rate.
Need for Flexibility: If you anticipate significant life changes, like moving house or needing to free up cash for other expenses, switching to a mortgage with more favorable terms could be beneficial.
Desire to Overpay: If you want to overpay on your mortgage but your current deal has restrictions, moving to a mortgage that allows overpayments without penalties might be worth considering.
Understanding the Break-Even Point
When you use the calculator, it will provide you with a break-even point, expressed as the number of months it would take to recover the costs of remortgaging early.
Break-Even Point = X Months
This result means that it will take X months to cover the total costs of remortgaging early, including any early repayment charges, arrangement fees, and other associated costs.
Who Would Benefit from an Early Remortgage?
Homeowners who plan to stay in their property beyond the break-even point would benefit from remortgaging early. After the break-even period, the savings from the lower interest rate will outweigh the initial costs, resulting in overall savings.
Who Might Not Benefit?
If you plan to sell your home or remortgage again before reaching the break-even point, the costs of remortgaging early may not be worth it. In such cases, you might end up paying more in fees than you save in interest.
How It Works
Important Information...
This information is generated by a computer and is based on certain assumptions, with results rounded for simplicity. This calculator is intended to provide a general estimate of costs.
It’s essential to obtain a specific quote from your lender and verify the figures independently before making any decisions. We cannot be held responsible for any inaccuracies.
