Your fixed-rate mortgage period can provide stability and predictability, but as it nears its end, it’s essential to plan your next steps. Many homeowners wonder whether they should remortgage or stick with their lender’s Standard Variable Rate (SVR). Let’s explore why remortgaging can often be the better option.
What Happens When a Fixed Rate Ends?
When your fixed-rate term ends, your mortgage automatically reverts to the lender’s SVR unless you take action. The SVR is typically higher than fixed or tracker rates, meaning your monthly repayments could increase significantly. This transition is why many homeowners choose to remortgage before their fixed-rate term expires.
The Benefits of Remortgaging
1. Potential Savings on Monthly Payments
Remortgaging will allow you to secure a new deal, often with a lower interest rate than the SVR. This can result in substantial savings on your monthly repayments.
2. Access to Better Rates
Mortgage rates change over time, and you may find that better deals are now available. If your financial situation has improved since your original application, such as a higher income or a lower loan-to-value (LTV) ratio, you may qualify for more competitive rates.
3. Flexibility to Adjust Terms
Remortgaging offers an opportunity to adjust the terms of your mortgage. You might want to extend or shorten the term, switch to a different product type (e.g., fixed or tracker), or borrow additional funds for home improvements.
4. Avoiding Payment Shock
Moving onto your lender’s SVR can lead to unexpected increases in your monthly repayments. By remortgaging, you may be able to lock in a new deal.
When to Start the Process
Ideally, you should begin exploring remortgage options six months before your fixed rate ends. This gives you time to research deals, complete the application process, and switch to a new product as seamlessly as possible.
How a Mortgage Broker Can Help
Remortgaging can feel complex, but a mortgage broker simplifies the process by:
• Comparing products across multiple lenders.
• Helping you understand your options and costs.
• Handling paperwork and liaising with lenders on your behalf.
Helen Ferneyhough Associates has extensive experience assisting clients with remortgaging. Our advisors will always be on hand to find the right deal available for your circumstances.
Contact Helen Ferneyhough Associates today to discuss your options.
Additional Resources
Stay updated on the Bank of England base rate, which affects mortgage rates, at Bank of England Base Rate.
Important Notices:
There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £195 to £695, and this will be discussed and agreed with you at the earliest opportunity.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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