Should You Remortgage Before Your Fixed Rate Ends?

If your fixed-rate mortgage is due to end within the next few months, now is the ideal time to start making plans. Many homeowners wait until their current deal has finished before looking for a new mortgage, but this could mean missing out on better options.

Planning ahead gives you more choice, more time to compare lenders and the opportunity to make the remortgaging process as smooth as possible.

When should you start looking for a new mortgage deal?

As a general rule, it’s worth reviewing your mortgage around six months before your fixed rate ends. Many lenders allow you to secure a new mortgage deal several months in advance, with the new rate starting as soon as your current fixed term expires.

Starting early doesn’t necessarily mean changing your mortgage immediately. Instead, it gives you time to explore your remortgage options and avoid making rushed decisions.

Why remortgage before your deal ends?

There are several benefits to arranging your next mortgage before your existing deal expires.

Avoid moving onto your lender’s standard variable rate

Once a fixed-rate mortgage ends, many borrowers automatically move onto their lender’s Standard Variable Rate (SVR). This rate is often higher than fixed-rate products, meaning your monthly repayments could increase.

Having a new mortgage ready means you can often avoid paying more than necessary.

Access a wider choice of deals

Mortgage products change regularly. By reviewing your options early, you can compare deals from a range of lenders rather than feeling pressured to accept the first available option.

A mortgage broker can help identify products that suit your circumstances and explain the differences between them.

Time to review your circumstances

Your financial situation may have changed since you took out your current mortgage. Perhaps your income has increased, you’ve reduced other borrowing or your property’s value has risen. These changes could affect the mortgage products available to you.

Reviewing everything in advance gives you the opportunity to choose a mortgage that better matches your current needs.

Should you stay with your current lender?

Sometimes your existing lender may offer a competitive product transfer, allowing you to switch to another mortgage without changing lenders.

However, this isn’t always the most suitable option. A whole-of-market mortgage broker can compare products from multiple lenders to see whether there are better rates or features available elsewhere.

The cheapest interest rate isn’t always the right choice either. Factors such as fees, flexibility and the ability to make overpayments can all influence which mortgage represents the best value.

Speak to a mortgage broker early

The earlier you start planning, the more options you’re likely to have. A mortgage broker can explain the remortgaging process, compare suitable lenders, handle much of the paperwork and help ensure your new mortgage is ready when your existing deal ends.

If your fixed-rate mortgage is due to expire within the next six months, now is the perfect time to review your options. A little preparation today could help you secure a more suitable deal and provide peace of mind for the years ahead.