Your Fixed Rate ends in 6 months. What could you be doing now?

If your fixed-rate mortgage deal ends in six months, now is a useful time to review your options. Preparing in advance gives you time to compare mortgage rates, consider the costs of switching and decide whether to remortgage or take a new deal with your existing lender. 

These steps can help you prepare. 

Review Your Current Details

Before making any decisions, it’s important to understand your current mortgage position. Start by checking your mortgage documents or latest statement to confirm the date your current fixed-rate deal ends. Also check whether early repayment charges apply and when they stop applying. 

Next, note your outstanding mortgage balance and current interest rate. 

You can also estimate how much equity you have in your home. This is calculated by subtracting your outstanding mortgage balance from your property’s estimated current value. For example, if your property is worth £300,000 and your mortgage balance is £180,000, you have £120,000 in equity. 

It’s also useful to calculate your loan-to-value (LTV) ratio, as this can affect the mortgage deals available to you. Your LTV is your mortgage balance expressed as a percentage of your property’s value. 

LTV = Mortgage Balance ÷ Property Value × 100 

In this example, £180,000 divided by £300,000, multiplied by 100, gives an LTV of 60%. 

These figures provide a useful starting point when considering your next mortgage options. Bear in mind that a lender’s valuation of your property may differ from your estimate. 

Compare Your Options

Once you understand your current mortgage position, it’s time to compare the options available to you. Start by checking product transfer deals with your existing lender. A product transfer means taking a new mortgage deal with the same lender, rather than moving your mortgage elsewhere. 

It’s also worth comparing remortgage deals from other lenders. A lower interest rate could reduce your monthly payments, but consider the overall cost of each deal rather than the interest rate alone. Other costs may include arrangement fees, valuation fees, legal costs and any early repayment charges. 

Secure a New Rate

If you find a suitable deal, you may be able to reserve a new fixed rate in advance. This can give you greater certainty about your future monthly payments. How far ahead you can reserve a rate depends on the lender and the deal, so check the timing and how long any offer remains valid. 

Arranging a new deal in advance is different from starting it early. Check the proposed start date and whether any early repayment charges on your current mortgage would apply. 

Some lenders allow you to change to a lower rate before your new deal starts if a suitable product becomes available. This is not automatic. You can continue to monitor mortgage rates, but check your lender’s rules, deadlines and any costs before requesting a change. 

Talk to a Mortgage Adviser 

Speaking to a mortgage adviser can help you compare suitable mortgages and assess the overall cost of each option, rather than simply choosing the deal with the lowest advertised interest rate. 

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