What Happens When my Fixed Rate Mortgage Ends?

Over the years, we have received a lot of enquiries asking questions such as what happens when my fixed rate mortgageA type of mortgage with an interest rate that is fixed for a... ends?

When your fixed-rate mortgage term ends, you will need to decide whether to move on to another product or stay on your current deal. This decision is an important one and should be carefully considered. It’s a good idea to compare different lenders and their deals, as well as consider any early repayment charges that may apply.

You may be able to switch lenders without paying the early repayment chargeA fee charged by lenders if the borrower pays off the mortga... if you’re happy with the terms and conditions of their new deal. It’s important to check the small print and understand how long your existing rate is fixed for before deciding what to do.

If you decide to stay on your existing deal, you may be moved onto a new lender’s standard variable rateThe interest rate charged by the lender that can vary over t... (SVR). This will likely be more expensive than your current deal, as SVRs tend to be higher than fixed-rate mortgages.

It’s also worth considering remortgaging to a new lender and/or product if you can find one that suits your needs and is better value for money than staying on your existing rate. This could involve looking at different products, such as trackers or discounted variable rates. It may also be a good idea to think about the length of time that you want to fix your mortgage.

In this article, we will explore this topic in more detail and help you to secure the best mortgage deal as per your profile.

Post Topics

What are considered fixed-rate mortgages?

Difference between fixed rate and standard variable rate

What to do when your fixed rate ends?

When you shouldn’t fix your mortgage rate?

What Happens When My Fixed Rate Mortgage Ends with Halifax?

How Can I Find the Best Deal with Halifax When My Fixed Rate Mortgage Ends?

What Happens When My Fixed Rate Mortgage Ends with Nationwide?

How Can I Find the Best Deal with Nationwide When My Fixed Rate Mortgage Ends?

Next steps

What are considered fixed-rate mortgages?

Fixed-rate mortgages are mortgages where the interest rate remains fixed for a predetermined period of time, usually 1-5 years. During the fixed-rate period, the borrower pays a set monthly repayment amount, including capital and interest. The advantage of this type of mortgage is that it gives borrowers peace of mind, knowing that their payments won’t change during the fixed period, even if there are fluctuations in interest rates.

What options do I have when my fixed-rate mortgage ends?

When your fixed-rate mortgage comes to an end, you have several options. You can either switch lenders and products or stay with your current lender.

If you decide to switch lenders, you should look for a product that best suits your needs and is better value than staying on your existing deal. You may be able to find a new fixed-rate mortgage that will provide a lower interest rate.

If you decide to remain with your current lender, you may be offered a new product. This could be another fixed-rate mortgage, a tracker or a discounted variable rate. It’s important to assess the terms and conditions of each option carefully, as they may differ from your existing deal. You should also check any early repayment charges that may apply if you decide to switch lenders or products.

Difference between fixed rate and standard variable rate

Fixed rates usually last between two to five years, with the most common being two or five-year deals. It is offered by most lenders where the interest rate is fixed for a set period and usually a lower interest rate in comparison to the lender’s standard variable rate.

Generally, two-year fixed rate deals are cheaper than five-year fixed rates. It is wise to assess your future plans and personal situations, such as whether you plan on moving or job changes, as this will be important to consider when deciding whether to go for a fixed rate and how long.

Fixed-rate products usually carry high early repayment charges, which may pose an expensive inconvenience for borrowers who wish to make changes to their living situation. Some products offer fixed rates with no early repayment charges, but it is important to read the terms and conditions of the product.

Standard variable rates are a lender’s default interest rate, which is the rate they charge if a borrower is not tied into any other deals. Lenders have different standard variable rates and are dependent on your mortgage terms. This is not linked to the UK base rateThe interest rate set by the Bank of England, affects the in...; the lender can increase or decrease it as they wish. The positive of being on a standard variable rate is that they offer a borrower more flexibility and freedom than fixed-rate does by avoiding potentially costly exit fees, especially if they don’t intend to stay in their property long term.

If you are coming towards the end of your fixed rate period and are looking to fix your interest payments again, it is wise to make sure you get organised early enough and start the process so that you can complete your application for a new fixed rate to be in place before your product switches to the lender’s standard variable rate and possibly face increased monthly payments.

What to do when your fixed rate ends?

As your mortgage broker, I’m here to guide you through the maze of mortgage options and ensure you secure the best deal for your home.

When your fixed-rate deal is near its end, you’ll face crucial decisions that could impact your finances for years to come. Don’t let this be a moment of confusion or missed opportunities.

Option 1: Renew with Your Current Lender

Your current lender will likely reach out with a renewal offer, making it a straightforward process. However, don’t assume their request is the best in town. As a team of specialist mortgage brokers, we suggest you contact us to compare your renewal offer with the broader market.

Option 2: Embrace the Standard Variable Rate

If you prefer to stay put, you’ll automatically switch to your lender’s standard variable rate. But beware! This rate can fluctuate, potentially raising your monthly payments.

Option 3: Explore New Mortgage Products with Your Current Lender

If you’re looking to borrow more or make changes to your mortgage, your current lender might offer tailored products. However, expect additional checks, especially if you increase your loan amount.

Option 4: RemortgageRefinancing an existing mortgage with a new mortgage. with a Different Lender

Remortgaging involves switching to a new lender, often for better rates or terms. While this requires checks similar to a new mortgage application, it should be simpler if your financial situation remains unchanged.

When you shouldn’t fix your mortgage rate?

If you plan to sell or move, fixed-rate deals often come with hefty early repayment charges. While some lenders allow you to port your mortgage to a new property, this may restrict your options, especially if you’re considering a more expensive or cheaper home. In such cases, staying on a standard variable rate is generally more prudent.

Towards the end of your mortgage term, fixing your rate may not offer significant benefits as the interest charged reduces each month. If you’re nearing the end of your repayment period, carefully consider whether fixing your rate is genuinely advantageous.

Don’t overlook the potential of your standard variable rate. Some borrowers are fortunate to have low variable rates embedded in their mortgage terms. Checking your standard variable rate could reveal a more favourable option than switching to a fixed-rate deal.

What Happens When My Fixed Rate Mortgage Ends with Halifax?

When your fixed-rate mortgage with Halifax comes to an end, you will automatically move onto Halifax’s Standard Variable Rate (SVR) unless you take action. This could mean a change in your monthly mortgage payments. Halifax offers various options at this stage, including renegotiating a new mortgage deal or remortgageing. It’s important to review your options well before your fixed-rate period ends to ensure you find the most suitable mortgage product for your needs.  

How Can I Find the Best Deal with Halifax When My Fixed Rate Mortgage Ends?

As your fixed-rate mortgage period with Halifax concludes, exploring your options for a new mortgage deal is crucial. Halifax provides a range of mortgage products suitable for different needs, including fixed-rate, tracker, and variable-rate mortgages. You can use the Halifax mortgage calculator on their website to estimate your potential monthly repayments and compare different mortgage deals. Additionally, Halifax offers personalised advice to help you understand which mortgage product might be best for you after your current contract ends. 

What Happens When My Fixed Rate Mortgage Ends with Nationwide?

When your fixed-rate mortgage with Nationwide comes to an end, you’ll automatically switch to Nationwide’s Standard Variable Rate (SVR) unless you’ve arranged otherwise. This could mean a change in your monthly mortgage repayments.

As a mortgage broker, I advise reviewing your options well before your fixed rate period concludes. Nationwide offers a variety of choices at this stage, including negotiating a new mortgage deal or remortgage. Considering these options in good time is crucial to ensure you secure a mortgage product that’s right for your current financial situation. For more detailed information and the latest options available, do visit Nationwide’s website.

How Can I Find the Best Deal with Nationwide When My Fixed Rate Mortgage Ends?

As your fixed-rate mortgage period with Nationwide nears its end, it’s essential to consider your next steps. Nationwide offers a range of mortgage products to suit different needs, including fixed-rate, tracker, and variable-rate mortgages. I recommend using the mortgage calculator on Nationwide’s website to get an idea of your potential monthly repayments and to compare various mortgage deals. Additionally, Nationwide provides personalised advice, which can be invaluable in understanding which mortgage product might be best for you after your current contract concludes.

Next steps

If you are reaching the end of your fixed-rate mortgage deal, then you should explore your options to avoid paying more than you need to. Talking to a mortgage broker can answer your questions, and in most cases, taking up another fixed-rate deal is more cost-effective than doing nothing at all.

FAQs

What Happens When My Fixed Rate Mortgage Ends?

When your fixed-rate mortgage ends, you typically have a few options. You can stay with your current lender and move to their Standard Variable Rate (SVR), remortgage with a different lender, or negotiate a new mortgage deal with your current provider. The choice depends on your circumstances, the current mortgage market, and the available deals.

Should I Remortgage with My Existing Lender or Look for a New One?

Deciding whether to remortgage with your existing lender or switch to a new one depends on the mortgage deals available. It’s wise to compare the rates and terms other lenders offer against your current lender’s deal. Sometimes, your current lender might offer a product transfer to a new deal, which can be simpler than switching lenders.

What Are the Differences Between Fixed Rate and Variable Rate Mortgages?

A fixed-rate mortgage offers a stable interest rate and monthly repayment for a set period, providing predictability in your financial planning. On the other hand, a variable rate mortgage, such as a tracker mortgage, has an interest rate that can change, usually in line with the Bank of England’s base rate. This means your monthly mortgage payment can increase or decrease.

How Do I Determine If It’s Worth Getting a New Mortgage Deal?

To determine if it’s worth getting a new mortgage deal, consider factors like the interest rate, monthly repayment, any product fees, and how they compare to your current deal. A mortgage calculator can be helpful in comparing the costs. Also, consider your personal circumstances, such as changes in income or financial goals.

When Should I Start Looking for a New Mortgage Before My Fixed Term Ends?

It’s advisable to start looking for a new mortgage deal plenty of time before your fixed-rate period ends, typically around three to six months in advance. This gives you enough time to explore the mortgage market, conduct an affordability check, and complete the mortgage application process without rushing.

Can I Overpay or Pay Off My Mortgage Early After the Fixed Term Ends? Yes, you can usually overpay or pay off your mortgage early, but this depends on the terms of your mortgage agreement. Some lenders allow you to make overpayments up to a certain percentage of the outstanding balance each year without penalty. Check your mortgage statement or consult your mortgage adviser for details specific to your mortgage product.

What Is the Typical Process and Timeline for a Mortgage Application?

The typical process for a mortgage application involves an affordability assessment, credit checkA check of a borrower's credit history, which is used by mor..., and verification of income and outgoings. The timeline can vary, but it generally takes a few weeks to a couple of months. Using a mortgage advisor can streamline this process, as they can provide expert advice and help you find a suitable mortgage.

How Do Interest Rate Changes Affect My Mortgage Post Fixed Term?

Interest rate changes primarily affect mortgages on a variable interest rate, like a tracker rateA type of mortgage with an interest rate that is set a certa... mortgage. If you’re on a variable-rate mortgage, your monthly mortgage payment can fluctuate with changes in the interest rate. For a fixed-rate mortgage, your rate and monthly repayment remain the same for the duration of the deal period.