Millions of UK homeowners have a fixed-rate mortgage that will end in the next few years. When that happens, your monthly payments can jump significantly if you do not act. This guide explains exactly what happens, when to act, and how to get the best deal when you remortgage.
What Happens When the Fixed Rate Expires
When your agreed fixed-rate period ends — typically after 2 or 5 years — your lender automatically moves you to their Standard Variable Rate (SVR).
The SVR Problem
| Factor | Fixed rate (typical) | SVR (typical) |
|---|---|---|
| Interest rate | 4.0–5.5% | 7.0–8.5% |
| Monthly payment (£200k, 25yr) | £1,056 – £1,222 | £1,396 – £1,570 |
| Extra cost per month | — | £200 – £400+ |
| Extra cost per year | — | £2,400 – £4,800+ |
The SVR is your lender’s default rate and it is almost always significantly higher than the best available deals. It can change at any time at the lender’s discretion.
You do not have to stay on the SVR. You have three main options.
Your Three Options
Option 1: Product Transfer (Stay with Your Lender)
A product transfer means moving to a new deal with your existing lender. This is the easiest option.
| Advantages | Disadvantages |
|---|---|
| No full application needed | Limited to one lender’s rates |
| Usually no valuation required | May not get the best rate on the market |
| Faster process (days, not weeks) | Cannot borrow more without a new application |
| No solicitor needed | No option to change lender terms |
| No affordability assessment in most cases |
Best for: Homeowners happy with their current lender who want a quick, hassle-free switch.
Option 2: Remortgage to a New Lender
Remortgaging means switching your mortgage to a different lender, usually to get a better rate or different terms.
| Advantages | Disadvantages |
|---|---|
| Access to the whole market | Full application and affordability check |
| Potentially lower rates | Valuation may be required |
| Can borrow additional funds | Requires a solicitor (often free via lender) |
| Can change mortgage term | Takes 4–8 weeks |
| Can switch mortgage type |
Best for: Homeowners who want the best possible rate, need to borrow more, or want to change their mortgage terms.
Option 3: Stay on the SVR
In rare cases, staying on the SVR can make sense.
| When it might make sense | Why |
|---|---|
| You plan to move soon | Avoids product fees on a deal you will exit quickly |
| You want flexibility | No ERCs — you can leave at any time |
| You are paying off the mortgage shortly | The remaining balance is small |
| You expect rates to fall sharply | Can switch when rates drop (risky strategy) |
For most people, staying on the SVR costs thousands of pounds a year unnecessarily.
When to Start Looking for a New Deal
The 6-Month Rule
| Timeline | Action |
|---|---|
| 6 months before | Start researching rates and speak to a broker |
| 4–5 months before | Apply for your preferred deal or product transfer |
| 2–3 months before | Complete the remortgage process |
| 1 month before | Ensure new deal is ready to start when fixed rate ends |
| Deal end date | New rate kicks in — no gap on SVR |
Most lenders let you lock in a rate 6 months before your current deal ends (some allow 9 months). If rates fall between locking in and completing, many lenders will let you switch to the lower rate at no cost.
Starting early gives you time to compare options without the pressure of a deadline.
What to Consider When Choosing a New Deal
Fixed Rate Length
| Term | Typical rate | Pros | Cons |
|---|---|---|---|
| 2-year fix | Lower rate | More flexibility, switch sooner | Remortgage costs every 2 years |
| 3-year fix | Mid-range | Good balance | Less common |
| 5-year fix | Slightly higher | Long-term certainty | Less flexibility |
| 10-year fix | Higher | Maximum stability | Early exit may incur ERCs |
Other Factors
| Factor | What to check |
|---|---|
| Product fee | Some deals charge £500–£2,000. Factor this into the total cost |
| Overpayment allowance | Most fixed deals allow 10% overpayment per year |
| Portability | Can you take the deal with you if you move? |
| Cashback | Some deals offer £500–£1,000 cashback |
| Early Repayment Charges | Percentage charged if you exit during the fixed period |
| Free valuation and legal work | Many remortgage offers include these |
Total Cost Comparison
Do not just compare headline rates. The total cost of a mortgage deal includes the interest, product fee, and any cashback.
| Deal | Rate | Fee | Monthly (£200k, 25yr) | Total over 2 years |
|---|---|---|---|---|
| Deal A | 4.2% | £0 | £1,078 | £25,872 |
| Deal B | 3.9% | £999 | £1,048 | £26,151 |
| Deal C | 4.0% | £500 | £1,058 | £25,892 |
In this example, Deal A with no fee is actually the cheapest over two years despite having the highest rate.
Using a Mortgage Broker
A whole-of-market mortgage broker searches thousands of deals for you, including some not available directly. They can be particularly valuable when your fixed rate is ending because:
- They know which lenders are currently competitive
- They handle the paperwork and application
- They can compare your lender’s product transfer with the wider market
- Some access exclusive broker-only deals
Brokers are either fee-free (paid by commission from the lender) or charge a fee (typically £300–£500). Both approaches are legitimate.
Related: Mortgage Broker Guide
How the Remortgage Process Works
| Step | Timeline |
|---|---|
| 1. Get quotes and compare | Week 1 |
| 2. Apply with chosen lender | Week 1–2 |
| 3. Lender valuation | Week 2–3 |
| 4. Mortgage offer issued | Week 3–4 |
| 5. Solicitor handles legal transfer | Week 4–6 |
| 6. Completion — new deal starts | Week 6–8 |
If you are doing a product transfer with the same lender, the process is much faster — often just a few days.
What If You Cannot Remortgage?
Some homeowners find it harder to remortgage, usually because their circumstances have changed since they took out their original mortgage.
| Situation | Options |
|---|---|
| Income has dropped | Product transfer (no affordability check) or stay on SVR |
| Credit score has worsened | Specialist lenders, product transfer |
| Property value has fallen | Product transfer, or wait for value recovery |
| Near retirement | Lender may limit term — product transfer may be easier |
| Self-employed less than 2 years | Product transfer, or specialist lenders |
A product transfer with your existing lender is typically the best route if you cannot pass a new lender’s affordability checks, as most lenders do not run a full affordability assessment for existing customers.
Remortgage Costs
| Cost | Amount |
|---|---|
| Product fee | £0 – £2,000 (depends on deal) |
| Valuation | Often free with remortgage deals |
| Solicitor / conveyancing | Often free with remortgage deals |
| Broker fee | £0 – £500 |
| Discharge fee (old lender) | £50 – £300 |
Many remortgage deals include free valuation and free legal work, so the only out-of-pocket cost may be the product fee and the discharge fee from your old lender.
Key Actions Checklist
- Check when your fixed rate ends — it is on your mortgage offer document
- Set a reminder for 6 months before that date
- Check your current mortgage balance and remaining term
- Find out your property’s current approximate value
- Calculate your loan-to-value ratio (balance ÷ property value × 100)
- Compare your lender’s product transfer rates with the wider market
- Speak to a mortgage broker for whole-of-market comparison
- Apply for your chosen deal and complete before the fixed rate ends
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