Monthly Payment Breakdown for a £100,000 Remortgage
Understanding exactly what you will pay each month helps you plan your finances and evaluate whether remortgaging makes sense right now. For a £100,000 repayment mortgage over a 25-year term, the approximate monthly costs at different rates are as follows.
At a 5-year fixed rate of 4.3%, you would pay around £545 per month. At a 2-year fixed rate of 4.6%, your monthly payment rises slightly to around £562 per month. If you remain on a typical SVR of 7.5%, your monthly cost would be approximately £739 per month.
Switching from the SVR to the 5-year fix therefore saves you around £194 each month — an annual saving of roughly £2,333. Across a full five-year fixed term that amounts to approximately £11,667 in total interest savings. Even the 2-year fix, which offers less long-term certainty, saves you around £177 per month versus the SVR, or about £2,130 per year.
These calculations assume a straight repayment mortgage. If you have an interest-only mortgage at £100,000, your monthly costs will be lower — at 4.3% you would pay around £358 per month in interest only — but you will need a credible repayment vehicle in place to clear the capital balance at the end of the term. Most lenders have moved away from interest-only for residential borrowers, but options do exist for those with sufficient equity and a clear repayment plan.
LTV Ratios and Rate Tiers for a £100,000 Loan
Your loan-to-value ratio has a direct impact on the mortgage rate you will be offered. Lenders price their products in bands — typically 60%, 75%, 80%, 85%, and 90% LTV — and the lower your LTV, the better the rate you can access.
A £100,000 loan on a property worth £125,000 gives you an LTV of 80%, placing you in the 80% tier. On a property worth £143,000 you would be at 70% LTV, and on a property worth £167,000 or more you would drop below 60% LTV and access the very best rates on the market. For many borrowers with a £100,000 balance, their property will have appreciated considerably since they took out the original mortgage, meaning their LTV is likely to be well below 75% — giving them access to some of the most competitive products available.
It is worth getting an up-to-date valuation before you apply. If your property has increased in value since you last remortgaged, you may find you have moved into a lower LTV band than you expect, which could unlock a noticeably better rate. For example, moving from a 75% LTV product to a 60% LTV product might reduce your rate by 0.2 to 0.4 percentage points, which on £100,000 over 25 years represents a worthwhile saving.
Borrowers near the end of their mortgage term will often have LTV ratios well below 60%, which means they sit in the most favourable rate tier. However, the shorter the remaining term, the more important it becomes to ensure the new mortgage term does not extend beyond a reasonable age limit, typically 70 or 75 for most lenders.
