Here’s What You Need to Know
Thousands of homeowners are approaching the end of their fixed-rate mortgage deals. After a period of rising interest rates and higher monthly costs, there are signs the mortgage market is beginning to settle. For some, that could mean monthly payments may actually go down when they move onto a new deal.
Whether your payments rise or fall, this is a crucial time to review your options. Understanding what happens when a mortgage deal ends, and the routes available, can help you plan with clarity.
What happens when your deal ends
When a fixed-rate deal finishes, most mortgages automatically move onto the lender’s Standard Variable Rate (SVR). This rate is usually higher than the one you’ve been paying, which means an increase in monthly costs.
Acting early, often around six months before your current deal ends, can give you time to review what’s available and secure a new rate in advance.
Product transfer vs remortgage
Two common options are:
Product transfer
Switching to a new mortgage product with your existing lender.
- Usually involves less paperwork
- Often no legal work or valuation needed
- Faster turnaround compared to moving lender
Remortgage
Moving your mortgage to a new lender.
- Can open up a wider choice of interest rates
- May allow changes to the loan amount or term
- Could release equity for purposes such as home improvements
The right option depends on individual circumstances, but comparing both routes ensures you don’t miss out on potential opportunities.
Why it matters
Even if your payments are set to decrease when your fixed rate ends, it’s still worth reviewing the deal in full.
Factors such as fees, flexibility, and how a new arrangement aligns with your long-term plans are all important considerations.
This is not just about avoiding a higher SVR. It’s also an opportunity to check whether your mortgage continues to support your financial goals.
Planning ahead
Many lenders allow borrowers to secure a new rate up to six months before the end of their current deal.
Planning ahead means you avoid last-minute decisions and reduce the risk of being moved onto an SVR.
Even if your current lender offers a product transfer, it can still be worth comparing this with remortgage options from other providers.
The takeaway
With interest rates having eased slightly after the sharp rises of 2022 and 2023 some borrowers may see their monthly payments fall. For others, the key is to avoid higher costs by preparing early and exploring the options available.
Whether through a product transfer or a remortgage, the important step is to review your mortgage before your current deal ends, so you can move forward with clarity and confidence. Please contact us to have a chat.
Appletree Financial Services
Helping clients review their mortgage options with clear, professional advice.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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