Read This Before You Remortgage - My Real 5-Year Cost Comparison
- Empowering Wealth Team
- Nov 19, 2025
- 7 min read
Updated: Nov 26, 2025
🏡 How I Made My Remortgage Decision (With Real Numbers).
A step-by-step guide you can use to feel more confident about your own mortgage decisions- even if you’ve never done this before.
Before we get into the numbers, here’s a quick mini-glossary to make everything feel clearer. If you want the full “Mortgages Explained” guide, you can read it here:
🧠 Mini Glossary (Short Version)
Mortgage deal / product: The interest rate and terms you choose for 2–5 years
Fixed rate: Rate stays the same
Tracker: Rate follows the Bank of England base rate
SVR: Lender’s default rate when your deal ends (often more expensive)
Remortgage: Switching to a new deal
Fee: One-off charge to take a mortgage deal
Broker: A professional who compares mortgages and explains your options
🌱 Before You Start (Important)
Most people were never taught how mortgages work — even people who have mortgages tell me:
“I just signed what my bank gave me.”
“I had no idea when my deal expired.”
“I feel embarrassed that I don’t understand any of this.”
You are not supposed to know this already. And you don’t need to understand everything — just a few key steps and concepts.
This article will guide you through them. You’re in the right place.
🔄 How Remortgaging Works (in 5 Simple Steps)
Even if you’ve never done it before, this is all that happens:
1. Your mortgage deal has an end date: Usually 2, 3 or 5 years after you first took it out.
2. A few months before it ends, you start shopping around: You can do this 3–6 months before your deal expires.
3. You compare deals: Either with your bank or through a broker.
4. You choose a new deal: Fixed rate or tracker, with or without a fee.
5. Your new deal starts when your old deal ends: If done properly, there’s no gap and you avoid the expensive SVR.
That’s it. The rest of this article shows you how I did it, and how you can follow the same process.
🏡 My Remortgage Story
Two years ago, I bought a home. The Bank of England Base Rate was 5.25%, and I chose a 2-year tracker (Base + 0.39%) because I expected interest rates to fall.
That decision worked out: my rate dropped from 5.64% to 4.39%, and I saved money during that time.
Now my deal is ending. If I do nothing, I will be moved to the lender’s SVR of 6.49%, which is much higher, so I needed to shop around again.
🔎 The Deals Available to Me Now
Here were the real options available to me from a high-street lender (at 19th November)
1️⃣ 2-Year Tracker — 4.24% (Base + 0.24%)
£1,785 per month + £999 fee
Would need to remortgage again in 2 years (likely to be another £999 fee)
2️⃣ 2-Year Fixed — 3.86%
£1,699 per month + £999 fee
Also requires remortgaging again in 2 years (likely to be another £999 fee)
3️⃣ 5-Year Fixed — 3.99%
£1,710 per month + £999 fee
Remortgage needed after 5 years
At first glance, these payments look pretty similar. But to be sure of the true cost I wanted to compare everything over the same timeframe.
📘 How to Compare Deals (The Part Most People Skip)
To properly compare mortgage deals, use:
✔ The same timeframe (e.g., 5 years): Because a 5-year fix lasts 5 years, but a 2-year deal requires switching twice.
✔ All fees: Especially important for 2-year products.
✔ What happens after the deal period ends: You don’t need perfect predictions - just a reasonable assumption to estimate future payments
✔ Your personal life priorities: Stability? Flexibility? Low stress? Lowest cost?
📊 My 5-Year Cost Comparison (Real Numbers)
To compare fairly, I worked out how much each option would cost me over the next 5 years, including:
the monthly payments
the fees
what happens after a 2-year deal ends
how many times I’d need to remortgage
1️⃣ Step 1 — Work out the monthly cost during the deal
Each deal lasts either 2 years (24 months) or 5 years (60 months). So I calculated: Monthly payment × number of months in the deal. This gives the cost during the deal.
2️⃣ Step 2 — Add the remortgage fees
Each time you take a new deal, you pay a fee.
2-year deals → two fees (one now + one in 2 years)
5-year deal → one fee (covers the entire 5 years)
So the tracker and 2-year fix both include £999 + £999, while the 5-year fix includes only £999.
3️⃣ Step 3 — Work out the cost after a 2-year deal ends
If I go for the tracker or the 2-year fixed, after the first 2 years, I’ll need another mortgage deal.
We don’t know exactly what future interest rates will be, so I made an assumption and estimated that in 2 year’s time I might remortgage and end up paying a rate of around 4% (equivalent to a monthly payment of £1,760 a month).
Then I calculated: £1,760 × 36 months (the remaining 3 years out of the 5-year window). This is added to both 2-year deals.
Note: This is a subjective assumption, while a 4% mortgage rate is a possible scenario based on some analysis, it is just one of several potential outcomes, it could be higher or lower - even your mortgage broker can’t predict what will happen to interest rates. I explain this assumption in more detail below.
4️⃣Step 4 — Add everything together
Now that we have the cost during the deal, the future cost after the deal ends (for 2-year products), and the remortgage fees - we simply add them up.
🪙 The Final Numbers
2-Year Tracker (4.24%)
24 months at £1,785 = £42,840
36 months at £1,760 = £63,360
2 x Fees = £999 +£999 = £1,998
Total 5-Year Cost: £108,198
2-Year Fixed (3.86%)
24 months at £1,699 = £40,776
36 months at £1,760 = £63,360
2 x Fees = £999 +£999 = £1,998
Total 5-Year Cost: £106,134
5-Year Fixed (3.99%)
60 months at £1,710 = £102,600
Fee = £999
Total 5-Year Cost: £103,599
💡 What This Means (Plain English)
Even though the monthly payments are similar, the total 5-year cost is very different using some assumptions.
The 5-year fix is the cheapest overall, the 2-year deals cost more because of extra fees, another remortgage, assumed higher future payments.
🌱 The Other Factors That Mattered
Money isn’t the only variable. I also considered:
✔ My health & work: As I recover from a long-term chronic health condition and work part-time, stability reduces stress and helps me plan.
✔ My long-term plan: This isn’t my “forever home”, but I don’t expect major changes in the next 5 years.
✔ Reducing admin and income checks: By staying with my current lender (who were also the cheapest), I avoid new paperwork, underwriting, and income checks.
📈 Why I Assumed a 4% Rate in 2 Years
This part can feel overwhelming, so here’s the simple version. I looked at:
Forecasts from banks and analysts – estimates, at the time of checking, ranged from 3% - 4%.
The uncertainty surrounding the Autumn Budget - people have been holding off making property purchasing decisions, so lenders have been reducing rates in recent weeks to win business from hesitant borrowers.
What’s happening around us that affects BoE rate decisions:
falling inflation - Inflation fell to 3.6%. The BoE raised interest rates at the end of 2021 to help control inflation. Since then, inflation has fallen a lot and the pressures that caused initial price rises have eased, therefore there is less reason for the bank to hold rates high
rising unemployment - Unemployment rose to 5%, suggesting some affordability fragility
uncertainty on UK’s economic growth - We have the Autumn Budget coming up, it’s hard to predict what the new forecasts of the economy will be when they are published and how the new budget will impact things.
No one, not even economists, know exactly what will happen. But 4% felt like a balanced, reasonable estimate to use in my comparison.
⭐ Important: You do not need to predict the economy. You just need a fair assumption so you can compare your options. We talk about Understanding Economics in upcoming courses.
🔏 Rate protection
One helpful feature of remortgaging is that you can secure a rate now, but still switch to a cheaper one if rates drop before your start date. This gives you:
protection if rates rise
flexibility if rates fall
My broker, Mel, and I will keep an eye on the market until my switch date (18 December). This gives me peace of mind either way.
🤝 How My Broker Helped Me
Even though I chose my current lender again, I still spoke to my broker, Mel.
He helped me:
check the whole market – he has access to rates that we can’t see directly
confirmed what was needed in terms of paperwork
talk through different interest rate scenarios
sense-check my decision – he understands my circumstances and long-term plans
monitor rates before the switch date
understand the products’ small print
A good broker doesn’t just find rates - they help you avoid mistakes and feel confident in your decision. If you’ve never worked with a broker before, it’s one of the easiest ways to reduce confusion and overwhelm.
🌟 My Final Decision: The 5-Year Fix at 3.99%
I may be wrong about where interest rates are headed - and that’s okay. What matters is that I made a systematic, well-informed decision and went with the best estimate at the time (19th November).
It gave me:
the lowest cost
the least admin
predictable payments
stability for 5 years
peace of mind
It was the right choice for me right now.
💬 What About You?
What factors went into your remortgage decision?
👀 Looking for a mortgage broker?
I work with Mel from Positive Solutions – he is fantastic, and I fully trust him to stay on top of the mortgage market and consider my best interests and circumstances to give me great advice, and a lovely chat!
⚠️ Disclaimer
This article is for education only and does not constitute personalised financial advice. Please speak to a qualified mortgage adviser or broker before choosing a mortgage.
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