What happens when your fixed rate mortgage deal ends?

When you buy a new home everyone is there to help you. Mortgage broker, estate agent, solicitor etc but………. What happens next?

Your mortgage interest rate and payment amount will generally be fixed for a set number of years or months. You will work out your budget accordingly and start paying the mortgage and bills.

But what happens when that Fixed Rate mortgage deal ends?

If you don’t do anything at all then you will automatically be put onto your lender’s Standard Variable Rate (SVR). This is likely to be higher than the rate you were fixed in to and as the name suggests is a variable amount so could change at any time by going up or down.

Your lender should write to you a few months before the fixed rate ends and will usually make an offer of another product or products which you can consider and move onto for another fixed period of time. These will be less than the SVR and will be fixed payments so are still a better option.

You could also speak to your local mortgage adviser and see what alternative rates are available on the market. A local mortgage broker will have access to many more lenders and rates and can advise which, if any, might be suitable for you. They will be able to compare full fees, rates and payments to ensure you move to the best option for you.

On the other hand, having spent so much time at home in the last couple of years, you may have decided that home improvements are a necessity! That kitchen you tolerated last year may suddenly have become the room you most dislike. Or you and your employer may have decided that working from home is a great idea and you intend to continue so you need some extra space for a home office. To make these changes you may need to look at extra borrowing to fund home improvements and alterations.

Whichever you choose why not speak to your local mortgage adviser who can discuss all the options with you and give you the guidance you need? Just like shopping around for your home or car insurance on renewal your mortgage broker may be able to help you save money on your mortgage payments.