What happens when my fixed-rate mortgage ends?

When your fixed rate mortgage deal ends, your mortgage renewal will revert to your lender’s standard variable rate (SVR) of interest.

It’s important to understand what this could mean for you and what (if anything) you should do about it.

You may have fixed your rate up to five years ago (sometimes even more), and a lot will have changed since then, both in your own circumstances and in the mortgage market at large.

What are my options when my fixed-rate mortgage ends?

You face a simple choice if your fixed-rate mortgage deal is ending soon: do nothing – in which case your lender will move you onto a SVR mortgage – or remortgage to a new deal.

What happens if I stay on an SVR mortgage?

This interest rate on an SVR mortgage will (almost always) be higher than your fixed rate.

To give you an idea of the difference, in October 2021, the average SVR was 4.41%, according to Moneyfacts. By contrast, the average SVR in October 2023 was 8.18%.

The SVR can also change at any time, at your lender’s discretion.

Various factors can cause it to rise, including changes to the Bank of England base rate, but it’s important to remember that the lender can increase it whenever they wish and don’t need to give a reason.

This can make it hard to budget for the long term since you don’t know how much your mortgage repayments may rise in months and years to come.

This is why most homeowners prefer to have some form of preferential mortgage deal.

What happens if I decide to remortgage?

If you choose to remortgage, you can either try to get a new deal with your current mortgage provider or shop around to find a different mortgage provider offering a better deal.

A mortgage broker can be a great help in doing this. They can search the whole market and recommend the best mortgage deals for you based on your specific needs.

Your lender will want to know if your circumstances have changed, as this could affect your affordability assessment and credit score.

Common changes that may affect your mortgage prospects include having children, taking on new debts, or becoming self-employed.

Learn more: what to do if you can't remortage due to affordability

What are the costs of remortgaging?

When you remortgage, there will usually be additional costs involved.

These may include:

• Early repayment fee, which may apply beyond the length of your fixed rate
• Arrangement fee 
• Booking fee (usually no more than £200)
• Valuation fee (with remortgaging, this is often free)
• Conveyancing fee (this is usually free when you remortgage)
• Mortgage broker fee 

Sometimes the fees might potentially outweigh the savings when remortgaging to a new deal, so consider this carefully. A mortgage broker will be able to help you work this out.

When is the best time to remortgage?

Ideally, you should start planning to remortgage around six months before your fixed-rate period ends.

Acting early can also help you avoid extra payments. When you actually remortgage may be influenced by a couple of other factors.

Most lenders will allow you to agree on a rate with them three months before you start paying. However, remember you may miss out on a cheaper deal later, so be sure to do your research and seek advice.

Bear in mind that your fixed rate period may include early repayment charges, which may apply beyond the length of your deal.

These charges can run into thousands of pounds sometimes, so you may be better off staying on the SVR for a short time rather than remortgaging immediately.

For more details, take a look at our guide to remortgaging.

Is it worth getting a new mortgage deal?

In some circumstances, remortgaging may not be the best option.

So although it’s good to start thinking about remortgaging in good time, it’s important not to rush into it – as you may be better off sticking with what you have.

Occasionally, an SVR mortgage won’t disadvantage you too much, although SVR rates have become significantly higher over the last year due to soaring mortgage rates.

But for example, if you are in a position to clear your mortgage with some large overpayments, there are typically no early repayment charges on an SVR mortgage.

Similarly, if your outstanding debt is under £50,000, any new mortgage fees could eat into any savings you stand to make, and many lenders won’t consider taking on a mortgage this small.

Also, if your financial situation has changed in a big way, for instance, if you or your partner is no longer working or you have new debt, lenders may be hesitant to provide a remortgage.

If you believe you can still comfortably afford the repayments on your new SVR mortgage, staying with it may be the easier option, at least until your circumstances improve again.

For more information on what sort of mortgage you may be able to afford, try our mortgage calculator.