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Remortgaging switches your mortgage to a better rate. The best time is when your fixed period ends or your LTV has dropped to a lower rate tier. Always check early repayment charges first.

Formula

New monthly payment = Remaining balance × Monthly rate / (1 − (1 + Monthly rate)^−Remaining months)

Balance: Remaining mortgage balance (Currency)
Rate: New mortgage interest rate (Annual percentage)
Term: New loan term (Years)

Guida passo passo

1Monthly saving = Old payment − New payment
2Breakeven = Total fees / Monthly saving
3Lower LTV → better rate → larger saving
4Check ERC before switching

Esempi risolti

Ingresso

£180k balance, from 6.5% to 4.5% over 20yr

Risultato

Monthly saving ~£200; £1,500 fees break even in 7.5 months

Domande frequenti

When should I remortgage?

If new rate is 0.5%+ lower AND break-even point (closing costs ÷ monthly savings) < years you plan to stay. Refinance fixed-rate when rates drop; ARM expiration mandatory check.

What are refinancing costs?

Appraisal ($300–600), underwriting ($400–900), title search ($150–300), points (0–2%), closing costs total 2–5% of loan. Need break-even within reasonable timeframe.

Can I remortgage if home value dropped?

Difficult if LTV > 80%. If you have equity, yes. If underwater, no (lender won't refinance). Government programs (HARP in US) sometimes help; check eligibility.

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