When your fixed rate ends, your mortgage doesn’t end. It moves onto the lender’s standard variable rate (SVR) unless you arrange a new deal. SVRs are usually several percentage points above the best new rates, so doing nothing can be expensive.
The payment shock
Millions of borrowers fixed at very low rates in 2020–2021 and have rolled, or are rolling, onto much higher rates. Take a £200,000, 25-year mortgage fixed at 2.5% for 5 years that reverts to a 7.5% SVR:
| Stage | Monthly payment |
|---|---|
| During the 2.5% fix | £897.23 |
| On the 7.5% SVR afterwards | £1,364.03 |
That’s an increase of £467 a month. Even moving to a new fix at around 5% would raise the payment substantially.
Your options
- Product transfer. Move to a new deal with your existing lender. It’s quick, usually no legal work, and often no new affordability check. Good if your circumstances have changed or your credit has weakened.
- Remortgage. Switch to a new lender for a better rate, cashback or to borrow more. It needs a valuation and legal work (often free on remortgage deals) and takes 4–8 weeks.
- Tracker or SVR, short term. If you plan to sell or repay soon, or expect rates to fall, a no-ERC tracker can bridge the gap. Staying on the SVR is rarely the cheapest choice.
A timeline for switching
- 6 months before: check your end date, balance and early repayment charge. Most lenders let you secure a new rate up to 6 months ahead.
- 4–6 months before: compare your lender’s product-transfer rates with the wider market or a broker.
- 3–4 months before: apply. If rates fall before completion, many lenders let you switch to a cheaper product.
- On the end date: the new deal starts. No gap on the SVR.
Check your loan-to-value
You’ve paid down capital and the property may have gone up in value, so you could be in a lower LTV band than when you first borrowed. That means a cheaper rate. A lump-sum overpayment just before switching can also tip you into a better band. Use the overpayment calculator, but stay within your ERC allowance.
Compare deals by true cost
A lower rate with a high fee isn’t always cheaper. The remortgage calculator compares staying on your current rate with up to two new deals, including fees, cashback and early repayment charges, and shows when each deal breaks even.
If you’re struggling with the new payment
Talk to your lender before you miss a payment. Under the Mortgage Charter, many lenders let you switch to interest-only for six months, or extend your term temporarily, without a new affordability check and without affecting your credit file. Free advice is also available from MoneyHelper and StepChange.
Common questions
Do I have to remortgage when my fix ends?
No, but you’ll move to the lender’s SVR, which is usually much higher. A product transfer is the quickest alternative.
How early can I lock in a new rate?
Usually up to six months before your deal ends, with no early repayment charge if the new deal starts after it.
Will I need a new affordability check?
Not usually for a product transfer with your current lender. A new lender will check. See mortgage stress tests.
Should I overpay before remortgaging?
If it moves you into a lower loan-to-value band, it can cut your new rate. Check your allowance with the overpayment calculator.
This guide is general information, not financial or tax advice.