What should I do if my fixed rate is coming to an end?

Hundreds of thousands of fixed mortgage deals are finishing over the next few months, leaving many homeowners wondering which way to turn next.

Around 353,000 fixed rate mortgages are ending between January and March this year, according to data from the Office for National Statistics (ONS). Its calculations, based on Bank of England (BoE) transactions data, suggest that the number of fixed rate mortgage deals coming to an end this year will peak in between April and June at 371,000.

Here, we look at some of the steps those whose fixed rates are due to finish in the next few weeks or months should consider taking.

1) Think about when you need to remortgage

Your starting point is finding out when your fixed rate mortgage deal ends. You don’t have to wait until your current deal finishes before you start looking for your next mortgage. Most lenders will allow you to sign up for your next mortgage three to six months in advance, so you should aim to start your remortgage search sooner rather than later.

2) Check what your existing lender can offer you

When thinking about remortgaging, always check what your existing lender can offer you first. Our online Mortgage Finder lets you check your eligibility and find the best deals available on the market, and also allows you to toggle your search to include deals your existing lender will offer, to ensure you get the best deal for you.

3) Seek professional help

There are numerous different remortgage deals to choose from, with rates changing all the time. It’s therefore a good idea to seek professional advice from a mortgage broker, as they will be able to recommend the best deal for you based on your individual circumstances, and can also support you through the application process.

4) Look at what mortgage rates are doing at the moment

Mortgage rates have jumped in recent months following 10 consecutive increases in the Bank of England base rate, although they are now showing signs of stabilising. The past couple of weeks have seen the introduction of a few sub-4% five-year fixed deals for the first time since October last year, and the hope is that more lenders will introduce lower fixed rate options.

5) Prepare for higher payments

Bear in mind though that if you took out your current fixed rate deal in the past few years, even though fixed rates are now starting to come down, you’re still likely to find that your next fixed rate will be considerably higher, meaning steeper monthly repayments. You should therefore think about how you’ll cover additional costs.

6) Overpay if you can

If you can afford to, consider overpaying your mortgage while you’re currently on a low fixed rate. Most lenders will allow you to repay up to 10% of your mortgage balance a year without penalty, and reducing your balance now means that even if you have to remortgage to a higher rate, owing less should help keep your monthly payments down. Take a look at our overpayment calculator to see how much you could save.

7) Don’t move onto your lender’s standard variable rate

The SVR is usually the most expensive mortgage rate you can be on. It’s therefore well worth considering remortgaging to an alternative rate when your deal finishes, or you risk paying much more than you need to.

8) Consider which type of mortgage you want

If you need budgeting certainty, then you may be set on remortgaging to a fixed rate mortgage. If, however, you’re comfortable accepting the fact that your mortgage payments may change over time, then tracker rate deals, which track the Bank of England base rate plus a set percentage, are currently more competitive than fixed rates. Some tracker deals don’t have Early Repayment Charges, so one option may be to remortgage to a tracker rate when your deal ends, and then move onto a fixed rate in future if rates come down further.