12 October 2023
If you are a homeowner with a fixed-rate mortgage, you have likely enjoyed the stability of consistent monthly payments over the years. However, all good things must come to an end, and that includes your fixed-rate mortgage term. In this post we will explore what happens when your fixed-rate mortgage expires and what steps you should take next. If you find yourself in this situation, remember that our experienced conveyancing team at Phillips Law is here to help you navigate the legal process to enable you to complete a re-mortgage.
Understanding Fixed-Rate Mortgages
Before we explore what happens when your fixed-rate mortgage ends, let’s quickly recap what a fixed-rate mortgage is. A fixed-rate mortgage is a type of home loan where your interest rate remains unchanged for a specific period, typically ranging from 2 to 5 years. This means your monthly mortgage payments stay the same, providing financial predictability.
When your fixed-rate mortgage term is coming to an end, there are several crucial things you need to be aware of:
- Transition to a New Rate: At the end of your fixed-rate period, your mortgage will automatically transition to your lender’s standard variable rate. This rate can be higher than what you were paying during your fixed period, which would result in increased monthly payments.
- Shopping for a New Deal: To avoid potentially higher payments, it’s essential to explore your options before your fixed rate expires. You can start looking for a new mortgage deal several months in advance. Your current lender may offer you a new fixed-rate deal, or you can choose to remortgage with a different lender for a more competitive rate. You should take the advice of a mortgage broker or financial advisor at this stage.
- Early Repayment Charges: Check your mortgage contract for any early repayment charges that may apply if you decide to switch lenders before your fixed-rate term ends. These charges can vary, so it’s essential to understand the financial implications.
Your Next Steps
As your fixed-rate mortgage approaches its expiration date, it’s essential to plan. Here’s a simple checklist to follow:
- Research New Mortgage Deals: Start researching new mortgage deals well in advance of your fixed rate ending. Compare interest rates, terms, and fees to find the best option for your financial situation.
- Consult with a Mortgage Advisor : Seek advice from a mortgage advisor who can help you navigate the market and find the most suitable mortgage product for your needs.
- Engage a Conveyancer: Contact our experienced conveyancing team at Phillips Law in Basingstoke. Our experts can assist with all the legal aspects of your mortgage transition, ensuring a hassle-free process.
- Budget for Potential Changes: Prepare for potential changes in your monthly mortgage payments and budget accordingly.
When your fixed-rate mortgage term comes to an end, it does require careful planning and consideration. By exploring your options, consulting with professionals such as a mortgage advisor at the outset, and engaging a conveyancer, you can smoothly navigate this transition.
If you have any questions or need assistance with conveyancing services during this period of transition, don’t hesitate to contact our conveyancing team. We’re here to provide expert guidance and support you every step of the way.
Email: [email protected]
Telephone: 01256 460830
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