My fixed rate mortgage is coming to an end: what next?

As a mortgage is a big financial commitment - and an expensive monthly outgoing - you shouldn't be paying more than you need. This article explains everything you need to know about remortgaging, including how the interest rate rises may impact your next deal. 

What is a fixed rate mortgage?

A fixed rate mortgage is when the interest rate on your mortgage payments is set at the same rate for a pre-agreed period - meaning your monthly repayments will be the same each month until the end of the agreed term.

When should I remortgage?

You can remortgage your property three to six months before your mortgage term ends. Reviewing your mortgage term ahead of time allows you to see if there are other, more favourable deals - either with your current lender or someone else.

If you fail to remortgage your property before your current term ends, your lender will place you on a standard variable rate (SVR), which could increase monthly repayments. Keep in mind that your lender sets their SVR, while a tracker mortgage follows the Bank of England’s base rate changes.

Should I remortgage with my existing lender?

There are both pros and cons to remortgaging with your existing lender. Staying with your current provider may save you from the additional valuation and solicitor fees that come with buying a property. However, by using a mortgage broker to search for a better deal, you could end up saving money over the lifetime of the mortgage. 

If the interest rate rises again, what happens to my mortgage?

If you are on a fixed rate mortgage, your monthly payments will not be affected until your term ends. Tracker or SVR mortgages will be affected and will follow in line with the Bank of England's base rate changes, meaning your mortgage payments could increase. 

Our article 'what does the interest rate rise mean for me', covers this topic in more detail. 

Should I take out a fixed or variable rate mortgage?

With rate changes increasing, now might be a good time to think about switching to a fixed rate. With the unpredictable market and the likelihood that rates will continue to rise, locking in a fixed rate deal could help you avoid the potential increase in monthly repayments should your variable rate increase. To learn about different types of mortgages, read here.

Because we play by the book we want to tell you that…

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

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