What if my fixed rate is ending?
What Happens When My Fixed Rate Mortgage Ends?
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This guide provides general information only. It is not financial advice or a personal recommendation and does not take account of your individual circumstances.
Quick answer
When a fixed rate ends, the mortgage normally moves onto the lender's standard variable rate unless you take a new deal. That rate is often higher, so payments usually rise. You can usually line up a new deal, either with your current lender or a new one, up to six months before the fixed rate ends, so it starts the day the old one finishes.
Key figures
- is the lender's default rate your mortgage usually moves onto
- SVR
- before the end date is when you can usually start arranging a new deal
- 6 months
- applies once the fixed period has ended, in most cases
- No ERC
What actually happens on the end date?
The fixed rate is only the first part of the mortgage. On the day it ends, the mortgage usually moves onto the lender's standard variable rate (SVR), its default rate, which it can change at any time. The term and the balance carry on as before. Only the rate, and so the monthly payment, changes.
You can usually stay on the SVR until the mortgage ends, and you can normally leave it at any time without a charge. The cost is the issue: the SVR is often higher than the rates on new deals.
Your options
- Take a product transfer. A new deal with your current lender.
- Remortgage. Move to a new deal with a different lender. See remortgaging explained.
- Stay on the SVR for a while, for example if you expect to sell soon or repay the mortgage.
- Overpay or repay part of it while there is no early repayment charge. See mortgage overpayments explained.
A simple timeline
- About six months before: check the end date, the current balance and what the SVR is. You can usually start applying for a new deal now.
- Three to four months before: compare your lender's product transfer offer with deals from other lenders, including fees.
- One to two months before: make sure the new deal is agreed, so it starts when the fixed rate ends.
- On the end date: check the first payment under the new deal.
If the new payment looks hard to afford
Rates may be higher than when you fixed, so the new payment can be a shock. Things to look at include:
- the term: a longer term lowers the monthly payment but increases the total interest;
- the fees on each deal, and whether a fee-free option works out cheaper;
- the household budget, before payments are missed rather than after.
If you are worried about falling behind, contact your lender early. Lenders have to treat borrowers in difficulty fairly, and MoneyHelper has free guidance on help with mortgage payments.
Check what else was tied to the old deal
When the mortgage changes, it is worth checking that any cover arranged around it still fits. That includes life cover sized to the balance and whether the household could keep up the new payment if an income stopped. See income protection explained.
Questions to ask your lender
- What is my exact end date and current balance?
- What rate will I pay on the SVR?
- What product transfer deals can you offer me, and what fees apply?
- Can I overpay before the new deal starts without a charge?
Frequently asked questions
No. If you do nothing, the mortgage normally continues on the lender's standard variable rate. That rate is often higher than a new deal, so most borrowers look at their options before the end date.
Yes. You can usually arrange a new deal up to about six months in advance so it starts when the fixed rate ends. Switching before the end date usually triggers an early repayment charge.
Lenders usually write to borrowers before a deal ends, but it is worth knowing the date yourself so you have time to compare options.
Usually yes. Standard variable rates do not normally carry early repayment charges, so you can move to a new deal or overpay without a penalty. Check your mortgage terms to be sure.
Sources
Related questions
- What if I could get a better mortgage deal?Remortgages, product transfers, fees and timingRead the guide
- What if I'm taking out a mortgage?How UK mortgages, rates and deal endings workRead the guide
- What if I paid off my mortgage faster?Overpayment allowances, interest savings and alternativesRead the guide
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