Reaching the end of a fixed term can bring uncertainty, especially if you fixed at a low rate. Here is what happens next, and the pros and cons of re-fixing versus staying on your lender's variable rate.
Reaching the end of a fixed-rate mortgage term can bring a sense of uncertainty, particularly if you previously fixed at a low rate, or if your circumstances have changed since you took the mortgage out. Speaking with a broker can help, our team regularly advises homeowners and investors on their options and the most suitable route for their circumstances.
In this guide we explain what happens when your fixed-rate mortgage ends, and weigh up the pros and cons of re-fixing your mortgage versus not doing so.
A fixed-rate mortgage is a home loan where the interest rate stays unchanged for a set period, typically two to five years. Once the fixed term ends, the mortgage usually reverts to the lender's standard variable rate (SVR), which is often not the most financially advantageous position. Exploring the alternatives could help you secure a better deal and potentially save money. If you want a refresher on how rates work, see our guide to mortgage interest rates explained.
Re-fixing involves renegotiating the terms with your current lender or switching to a new lender, the latter is known as remortgaging. This option provides stability by fixing your interest rate for another term, usually two to five years, though some products let you fix for longer (10 years, for example).
Choosing not to re-fix means reverting to your lender's SVR, which is typically higher than fixed rates. This suits homeowners who prefer flexibility or anticipate a change in circumstances.
Remortgaging offers stability and peace of mind but less flexibility. Staying on the SVR provides more freedom but exposes you to rate increases. The right choice depends on your circumstances, risk tolerance and financial goals.
Ultimately, the decision depends on your personal circumstances, risk tolerance and financial goals. Consulting a mortgage adviser can help you weigh up the options and find the most suitable solution for your specific needs. It is worth starting the conversation around three to six months before your fixed rate ends, so a new deal can be lined up to take effect the moment your current one expires.
Speak to an adviser before you slip onto the SVR. We will compare re-fixing against the whole market and recommend the most suitable option for your circumstances.