What happens when your fixed rate ends?

What happens when your fixed rate ends

Your fixed rate ends on the date in your mortgage offer. From the next day your lender charges a different rate, usually its standard variable rate, unless you have arranged a new deal. Some mortgages move to a follow on rate instead, often a tracker set out in your offer. Your monthly payment changes from your next payment date.

Most lenders write to you before your deal ends with the rate you will move to and the deals they can offer you. Your mortgage does not end, and nothing happens to your home: only the rate changes.

What it could cost

Standard variable rates are usually well above the best fixed deals. On a £200,000 repayment mortgage over 25 years, moving from 4.50% to a variable rate of 7.00% would raise the payment from about £1,112 to about £1,414 a month, an extra £302, or over £3,600 a year. The calculator above uses today’s typical variable rate when Theo’s live figures load. See how much your mortgage could go up for more scenarios.

Your options

You can take a new deal with your current lender, known as a product transfer, move to a new lender, or stay on the variable rate. A product transfer is usually the quickest. Moving lender opens up the whole market but takes longer. Staying on the variable rate gives you flexibility, because there is normally no charge to leave, but it usually costs the most each month. See how remortgaging works.

The timeline

See how early you can remortgage for more on the six month window.

If rates are rising or falling

If fixed rates are rising, securing a deal early protects you, because your offer usually holds for around six months. If they are falling, you can often switch to a lower rate before your new deal starts. Theo’s reading of which way rates are moving updates every weekday.