We have derived the 2-D analytical multidomain electrostatics model of the ferroelectric tunnel junction (FTJ) in part-I of this work. Here, we have used the 2-D potential functions from part-I to determine the depolarizing energy density of the ferroelectric layer. The coupled solution of the Landau Ginzburg–Devonshire (LGD) equation with Poisson’s equation is obtained to capture the domain texture in the ferroelectric layer. The nucleation and movement of the domain wall are incorporated into the model by minimizing net ferroelectric energy (depolarization energy density + free energy density + gradient energy density). Due to the mathematical complexity, spontaneous polarization and coercive electric field are assumed to be fixed, and the net system energy is minimized only by domain wall nucleation and movement in the ferroelectric layer. The analysis of this article is twofold; first, we study the impact of domain dynamics on electrostatics in an FTJ. Subsequently, the obtained electrostatics is used to study the variations in tunneling current, and ON/OFF ratio [tunnel electroresistance (TER)] originated from multidomain dynamics. We show that ON/OFF tunneling current density and TER varies locally in the ferroelectric region, and approximately one-decade local variations in current density are observed. The optimization techniques to achieve a uniform and maximum TER are also discussed. Furthermore, the impact of the bottom insulator layer on ferroelectric’s gradient energy is also studied.