When a fixed rate ends, nothing arrives to stop you drifting onto your lender's standard variable rate, which is usually the most expensive place your mortgage can sit. This is what actually happens on the day, the three options you have and how early you can act.
A fixed rate mortgage does not end with a bang. There is no cliff edge, no letter demanding action, nothing that stops working. Your direct debit simply changes amount one month, usually upwards; the mortgage carries on.
That quietness is the problem. Drifting onto a lender's standard variable rate is one of the more expensive things that can happen to a household without anybody deciding anything and it happens to a great many people every year purely because the date passed unnoticed.
What follows is how the process works and what your options are. It is a general explanation rather than advice about your own mortgage, which is a conversation for a broker or your lender, since the right answer depends on numbers only they can see.
The short version
- When the fix ends you move automatically onto the lender's standard variable rate, which is usually higher
- You can normally line up a new deal three to six months before the end date
- A product transfer stays with your lender and is quicker; a remortgage moves lender and may cost less
- Leaving a fix early usually triggers an early repayment charge, so check the date before you act
- The loan to value band you fall into matters as much as the headline rate
- Put the end date in a calendar the day the deal starts, because nothing else will remind you
What actually happens on the day it ends
Your fixed rate is a product sitting on top of the mortgage, not the mortgage itself. When the product term runs out, the loan reverts to the lender's standard variable rate, often shortened to SVR.
Three things are worth understanding about the SVR.
It is set by the lender rather than tracking anything formally, so it can move when the lender chooses. It is usually well above the rates the same lender offers new and existing customers on fixed products. And there is normally no early repayment charge while you are on it, which is the one genuine advantage: you can leave whenever you like.
That last point matters if the end date has already passed. Sitting on the SVR for a month or two while you sort out something better is inconvenient rather than disastrous and you are not locked in.
Your three options
| Option | What it means | Usually suits |
|---|---|---|
| Do nothing | You roll onto the standard variable rate | Almost nobody, beyond a short gap while deciding |
| Product transfer | A new deal from your existing lender | Speed, or where a full affordability check would be difficult |
| Remortgage | Moving the loan to a different lender | Getting the best rate available, if you have time |
A product transfer is the simple one. You stay put, pick from the deals your lender offers existing customers; the loan carries on with the same account and the same legal work already done. There is usually no valuation and often no full affordability reassessment, which makes it fast and makes it the practical route if your circumstances have changed in a way a new lender might question.
A remortgage means a new lender and therefore a new application: affordability checks, a valuation and legal work, though many remortgage deals include the legal costs. It takes longer, often a month or two; it opens up the whole market rather than one lender's range.
The honest summary is that a product transfer is easier and a remortgage is often cheaper and which wins depends on the gap between the two offers and how much hassle that gap is worth to you.
How early can you lock in a new deal?
Most lenders let you secure a new rate somewhere between three and six months before your current one ends, though the exact window varies and is worth confirming with yours.
This is more useful than it sounds. Securing a rate early does not usually commit you: if rates fall before your deal starts, you can generally switch to the better one and if they rise you have already protected yourself. In effect it is an option rather than a decision, which is why starting early is rarely the wrong move.
What it does require is not leaving it until the month before, when a remortgage may simply not complete in time and the product transfer becomes your only realistic choice.
What decides the rate you are offered
Three things do most of the work and one of them is partly within your control.
Loan to value. This is your outstanding balance as a percentage of what the property is worth and lenders price in bands. Dropping below a threshold, commonly 90, 85, 80, 75 or 60 per cent, can move you into a better band. Because the property has probably changed in value since you last looked and because you have been paying the balance down, you may already be in a better band than you assume. It is worth working out before you start.
The fee. A lower headline rate often comes with a larger arrangement fee. On a large balance the rate dominates; on a small one the fee can easily outweigh it. Compare the total cost over the fixed period rather than the rate on its own.
The term and type. How long you fix for and whether you fix at all changes the price. There is no universally right answer, only a trade off between certainty and flexibility.
If your balance is close to a loan to value threshold, it is sometimes worth paying a lump sum to cross it, because the saving over a whole fixed term can be considerably more than the payment. Whether that is true for you is arithmetic worth doing, or asking a broker to do.
Early repayment charges and overpayments
While you are inside a fixed period, leaving early normally triggers an early repayment charge, typically a percentage of the outstanding balance and often tapering down each year of the deal. It is set out in your mortgage offer.
Separately, most fixed deals allow you to overpay a certain amount each year without triggering that charge, very commonly ten per cent of the balance. That allowance is worth knowing about, because overpaying reduces both the balance and the loan to value band you will be assessed in when the deal ends.
Two practical points. Check whether your lender applies overpayments to the balance immediately or only once a year, as it changes the benefit. And check whether an overpayment reduces the monthly payment or shortens the term, since lenders differ and the two have quite different effects.
Have the paperwork ready
A remortgage is a fresh application and fresh applications want evidence. Payslips, bank statements, identification and details of the property itself all get asked for, usually with a deadline attached.
The property side is the part people are least ready for. A lender's valuer may raise questions about an extension, about the construction type, or about work that has been done; the answers live in the same certificates and guarantees a buyer's solicitor would ask for. If you have them to hand the process is uneventful; if you do not, it stalls in exactly the way a house sale stalls.
This is the quiet argument for keeping a digital property logbook even when you have no intention of moving. A mortgage runs the length of your ownership and it asks questions about the house roughly every few years.
Never miss the date again
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