What to Consider Before Your Fixed Rate Ends
Tens of thousands of homeowners in the UK come to the end of their fixed-rate mortgage deals every month. If yours is ending in the next six months, the decision about what to do next deserves careful thought, not just a quick comparison on a price aggregator.
Here’s what to consider.
What Happens When Your Fixed Rate Ends?
When your fixed-rate deal expires, you automatically move onto your lender’s Standard Variable Rate (SVR) unless you take action. SVRs are almost always higher than the fixed deals available in the market, and they can change at any time.
For most people, reverting to the SVR is something to avoid. But the right alternative isn’t simply the cheapest deal on the market today, it’s the deal that best fits your circumstances over the coming years.
How Far in Advance Should You Look?
Mortgage offers are typically valid for three to six months, depending on the lender. This means you can often lock in a new deal several months before your current one ends, even if it doesn’t complete until the existing fix expires.
In a market where rates have been shifting, acting early gives you options. If rates fall further before your deal completes, many brokers can renegotiate. If they rise, you’re protected.
Starting the conversation four to six months before your fixed rate ends is sensible. Six months before is better.
Stay With Your Existing Lender or Switch?
Your current lender will almost certainly offer you a product transfer, a new rate without the full application process. This can be convenient and sometimes the right answer. But it limits your options to one lender’s range.
The whole mortgage market contains dozens of lenders offering hundreds of products. As an independent broker, I can look across all of them to find the right fit, not just the most convenient one.
Sometimes the best rate is with your existing lender. Often it isn’t. The only way to know is to look at the whole picture.
Beyond the Rate: Other Things That Matter
The interest rate is the most visible number, but it’s not the only one. Arrangement fees, early repayment charges, overpayment flexibility, and cashback deals all affect the true cost of a mortgage deal.
For homeowners who have seen their property’s value increase, remortgaging can also be an opportunity to access equity, for home improvements, paying off other debts, or releasing funds for other purposes.
Get in touch before your fixed rate ends. We’ll look at your whole situation and help you make the right decision, not just the easiest one.
