What Happens When Your Fixed-Rate Mortgage Ends?

What happens when fixed rate mortgage ends? Your mortgage itself does not finish, but the interest rate you agreed for the fixed period comes to an end. Unless you arrange another mortgage deal, you will usually move onto your lender’s applicable variable or reversion rate, which could mean your monthly repayments change.

For many homeowners, the end of a fixed-rate mortgage is therefore an important opportunity to review their borrowing. You may be able to arrange another deal with your existing lender through a product transfer or explore Remortgages with another lender. At ABC Mortgages, we help homeowners throughout Kent understand their options before a fixed mortgage deal ends, taking into account their existing mortgage, affordability, future plans and the costs involved in switching.

What Happens When Your Fixed-Rate Mortgage Ends?

When your fixed-rate mortgage ends, the interest rate that has been guaranteed for the agreed period stops applying. If you do not arrange another deal, your lender will usually move your mortgage onto its applicable Standard Variable Rate (SVR) or another reversion rate specified within your mortgage terms.

Your mortgage does not disappear or become fully repayable simply because the fixed period has finished. You continue making mortgage repayments, but the interest rate used to calculate those repayments may change. For example, if you originally took out a 25-year mortgage with a five-year fixed rate, the mortgage could still have approximately 20 years remaining once the fixed deal finishes. This is why understanding what happens when fixed rate mortgage ends is important. Rather than waiting until the change takes place, reviewing your mortgage beforehand can give you time to consider whether staying with your current lender or remortgaging elsewhere may be more appropriate.

Does Your Mortgage End When the Fixed Rate Ends?

No. The end of your fixed rate and the end of your mortgage term are two different things.

Your mortgage term is the overall period over which the mortgage is scheduled to be repaid, such as 20, 25, 30 or 35 years. A fixed-rate period is usually considerably shorter. You might, for example, have a two-year or five-year fixed mortgage within a much longer overall mortgage term. When that fixed-rate period finishes, the outstanding mortgage balance remains and you continue making payments.

What changes is the deal attached to your borrowing. Unless another mortgage arrangement has been made, you will normally move onto the lender’s applicable variable or reversion rate. This distinction is particularly important if you are approaching the end of your first fixed-rate mortgage, as it can be easy to assume the whole mortgage needs to be rearranged from scratch.

What Is the Standard Variable Rate After a Fixed Mortgage?

A Standard Variable Rate, often shortened to SVR, is a mortgage interest rate set by the lender. Unlike a fixed rate, an SVR can change. The lender determines the rate in accordance with the terms of the mortgage, and changes may affect how much you pay each month.

The SVR should not necessarily be confused with a mortgage product that directly tracks the Bank of England base rate. While wider interest-rate movements can influence lender pricing, an SVR is ultimately set by the mortgage provider. If you reach the end of your fixed mortgage without arranging another deal, you may automatically move onto this rate or another applicable reversion rate.

That does not necessarily mean moving onto the SVR is always unsuitable. However, because the rate may be different from your previous fixed rate, it is sensible to understand what the change could mean for your mortgage payments.

Will Your Mortgage Payments Change When the Fixed Rate Ends?

They can. If the rate you move onto is higher than your existing fixed rate, your monthly mortgage repayments may increase. If the new rate is lower, your payments could potentially decrease. The amount you pay will also depend on factors such as your outstanding mortgage balance and the remaining term.

For example, two borrowers moving onto the same interest rate could have very different monthly repayments because one owes significantly more than the other. This is one reason to review the figures before your current deal expires rather than simply waiting to see what happens. ABC Mortgages’ Mortgage Repayment Calculator can give you an initial indication of how different interest rates, mortgage amounts and terms could affect monthly repayments.

However, a calculator is only an illustration. Your actual mortgage payments will depend on the terms of the mortgage arranged.

What Are Your Options When Your Fixed Rate Mortgage Ends?

Understanding what happens when fixed rate mortgage ends is only the first step. You then need to decide what you want to do next. One possibility is a product transfer. This involves moving onto another mortgage deal offered by your existing lender rather than changing mortgage provider.

Another option is to remortgage. Remortgaging involves replacing your existing mortgage with a new mortgage from another lender while remaining in the same property.

You could also remain on your lender’s applicable variable or reversion rate, either temporarily or for longer, depending on your circumstances. There is no single option that is automatically right for everyone. Your existing mortgage, remaining balance, property value, affordability, future plans, available mortgage products and any associated fees all need to be considered.

ABC Mortgages can help you compare these possibilities so you understand both the immediate monthly cost and the wider implications of each option.

Should You Remortgage When Your Fixed Rate Ends?

The end of a fixed-rate deal is one of the most common times homeowners consider remortgaging.

A remortgage allows you to move your mortgage to another lender, potentially giving you access to different rates, features and mortgage products. However, remortgaging is not automatically the right choice simply because your fixed deal is ending.

A new lender will normally need to assess your application, including your income, expenditure, credit position, affordability and the property itself. There may also be product fees or other costs associated with changing mortgage. Your existing lender may offer another suitable product without requiring you to move your borrowing elsewhere.

This means the decision should be based on the overall cost and suitability of the available options rather than solely on which mortgage advert displays the lowest headline rate. If you want to explore the options available when your fixed rate ends, ABC’s Remortgages page explains the process in more detail.

Product Transfer or Remortgage: Which Should You Choose?

A product transfer and remortgage can both help you move away from your lender’s variable rate, but they work differently. With a product transfer, you remain with your current lender and move onto another mortgage product offered by that provider. With a remortgage, you move the mortgage to a different lender.

A product transfer may sometimes involve a simpler process, while remortgaging allows you to consider mortgage options from other lenders. However, convenience should not be considered in isolation. Interest rates, arrangement fees, mortgage features, affordability and the overall cost should all be taken into account.

ABC Mortgages can help you compare these options based on your circumstances. You can also read our guide on whether it is better to remortgage or stay with your current lender for a more detailed comparison.

When Should You Start Looking at Your Mortgage Options?

You do not have to wait until your fixed-rate mortgage has actually ended before reviewing your options. Starting earlier gives you time to understand when your current deal expires, check whether any early repayment charges apply and investigate the mortgage options potentially available.

Exactly how far in advance you can secure or apply for another deal will depend on the lender and mortgage product.

The important thing is not to leave everything until the last moment. If your mortgage is approaching the end of its fixed period, you can start gathering information about your outstanding balance, current rate, property value and financial circumstances.

We have also written a dedicated guide on when is the best time to remortgage, which looks at the timing of a remortgage in more detail.

What If Your Circumstances Have Changed Since You Took Out Your Mortgage?

A lot can change during a two, five or even ten-year fixed mortgage period. You may have changed jobs, become self-employed, received a pay rise, reduced your working hours, started a family or taken on additional financial commitments.

Your credit history may also have changed since you originally applied for the mortgage. These changes can affect the options available when your current mortgage deal ends. If you apply to remortgage with another lender, your financial circumstances will normally be reassessed. A lender may review your income, expenditure, outstanding commitments and credit position before deciding how much it is prepared to lend.

Your current lender may approach a product transfer differently, depending on the circumstances and what changes you are making to the mortgage. If your circumstances have changed significantly, speaking to an adviser before your fixed rate expires can help you understand the options available rather than assuming your next mortgage will work exactly like the previous one.

What Happens If You Do Nothing When Your Fixed Rate Ends?

If you do nothing when your fixed-rate deal finishes, your mortgage will normally continue on the lender’s applicable SVR or reversion rate. Your mortgage payments will then be calculated using that rate. If the rate is higher than the fixed rate you were previously paying, your monthly repayments may rise. The rate can also change in the future, unlike a fixed mortgage where the agreed interest rate remains the same for the fixed period.

However, it is important not to assume that every homeowner must immediately remortgage. Some people may deliberately remain on a variable rate for a period because of their circumstances or future plans. The important thing is to make the decision intentionally rather than ending up on the lender’s variable rate simply because you did not realise your fixed deal was finishing.

Can You Stay on a Standard Variable Rate?

Yes. You do not necessarily have to arrange another fixed mortgage when your existing deal finishes. Some borrowers may decide to remain on the lender’s variable rate, particularly if they value flexibility or expect their circumstances to change shortly. For example, someone planning to sell their property soon may want to consider whether taking another mortgage with an early repayment charge would suit their plans. Another borrower might be considering a significant mortgage overpayment or expecting to repay the mortgage in the near future.

However, variable rates can change, so the amount you pay may not remain the same. Whether remaining on the SVR is appropriate depends on the rate, mortgage terms, your future plans and the alternative products available.

What Costs Should You Consider Before Switching Mortgage Deals?

When comparing mortgage options, it is important to look beyond the interest rate. A new mortgage may have a product or arrangement fee, while valuation or legal costs could also apply depending on the lender and product. If you switch mortgages before your existing fixed-rate period has finished, you may also face an early repayment charge. Some mortgage products include incentives that cover certain costs, but these vary and should not be assumed to apply universally.

The overall cost should therefore be considered alongside the monthly repayment. A mortgage offering a lower interest rate may not necessarily be cheaper overall once product fees and other charges are taken into account.

Our Mortgage Repayment Calculator can help illustrate potential monthly payments, but professional advice can help you assess the wider costs associated with changing mortgage.

What If Your Fixed Rate Ends and You Are Planning to Move Home?

Your future plans are particularly important when reviewing a mortgage deal. If you expect to move home in the near future, taking another mortgage with a lengthy fixed period and significant early repayment charges may require careful consideration. Some mortgages are portable, meaning you may be able to apply to take an existing mortgage product with you when you move property. However, mortgage porting is not automatic, and you will normally need to meet the lender’s criteria for the new borrowing and property.

Alternatively, you may decide that a different mortgage arrangement makes more sense based on the timing of your move.

ABC Mortgages’ Moving Home Mortgages and Mortgage Porting pages explain these options in greater detail. If a house move is likely, let your adviser know before selecting your next mortgage product so your future plans can be considered alongside your immediate borrowing needs.

What If You Cannot Afford the New Mortgage Payments?

If your current fixed-rate deal is ending and you are concerned about the mortgage payments that may follow, it is important to address the situation as early as possible. Do not simply ignore the issue and wait until payments become unaffordable.

Reviewing your mortgage before the fixed period finishes can help you understand whether another product may be available. You should also speak to your existing lender if you are worried about maintaining mortgage repayments.

Your wider financial position may also need to be considered, including changes to income, household expenditure and other commitments. ABC Mortgages can help you explore mortgage options where appropriate, but if you are already struggling financially, you may also benefit from independent debt or money guidance. The sooner the position is understood, the more time you have to consider the available options.

How ABC Mortgages Can Help When Your Fixed Rate Ends

If you are unsure what happens when fixed rate mortgage ends, ABC Mortgages can help you review your current position before your deal expires. We will look at your existing mortgage, including the outstanding balance, current interest rate, fixed-deal end date and any early repayment charges that may apply. We can then discuss your current income, expenditure, future plans and what you want from your next mortgage.

Depending on your circumstances, that could involve comparing another deal with your existing lender against suitable remortgage options from other lenders available to us. We will explain the rates, fees and relevant features so you can make an informed decision based on the overall mortgage rather than simply focusing on the headline interest rate.

If you decide to proceed with a remortgage, we can also guide you through the application process from your initial review through to completion.

Fixed-Rate Mortgage Advice in Kent

Based in Sittingbourne, ABC Mortgages helps homeowners throughout Kent review their mortgage as a fixed-rate deal approaches its end. We work with clients across Maidstone, Medway, Faversham, Canterbury, Ashford, Sheerness and the surrounding areas, as well as helping homeowners further afield.

Whether you are approaching the end of your first fixed mortgage, have remortgaged previously or your circumstances have changed significantly since your last application, we can help you understand the options available. Reviewing your position before your deal ends can give you more time to make a considered decision about what happens next.

Frequently Asked Questions About What Happens When a Fixed Rate Mortgage Ends

What happens when your fixed-rate mortgage ends?

When your fixed-rate mortgage ends, the fixed interest rate stops applying. If you have not arranged another mortgage deal, you will usually move onto your lender’s applicable Standard Variable Rate or another reversion rate.

Does your mortgage automatically go onto a variable rate?

Usually, your mortgage will move onto the lender’s applicable variable or reversion rate if another deal has not been arranged. You should check your mortgage terms or speak to your lender to confirm what applies to your mortgage.

Do you have to remortgage when your fixed rate ends?

No. Remortgaging is one option, but you may also be able to arrange a product transfer with your existing lender or remain on the applicable variable rate. The appropriate choice depends on your circumstances and the options available.

Can you stay with your existing mortgage lender?

Yes. Your existing lender may offer another mortgage product through a product transfer. It can still be useful to compare this with other options before deciding how to proceed.

How early should you review your mortgage deal?

It can be useful to start reviewing your options before the fixed deal actually expires. How early you can apply for or reserve another mortgage will depend on the lender and product.

Can monthly payments increase when a fixed rate ends?

Yes. If the interest rate applying after your fixed deal ends is higher than your current rate, your monthly repayments may increase. Your outstanding balance and remaining mortgage term will also affect the amount you pay.

What happens if my circumstances have changed?

Changes to your income, employment, expenditure, credit history or financial commitments could affect your mortgage options. If you apply to another lender, your current circumstances will usually be assessed as part of the application.

Is Your Fixed-Rate Mortgage Coming to an End?

If you are wondering what happens when fixed rate mortgage ends, reviewing your options before the deal expires can help you understand what your existing lender may offer and whether a remortgage could be suitable.

ABC Mortgages can assess your existing mortgage, current circumstances and future plans before helping you explore the options available. Whether you remain with your existing lender or decide to remortgage, we will explain the key considerations and support you through the next steps.

Contact ABC Mortgages today to speak with an experienced mortgage adviser about your fixed-rate mortgage coming to an end.

Your home may be repossessed if you do not keep up repayments on your mortgage.