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Remortgage Before the End of a Fixed Term

Can I remortgage if I’m on a fixed rate deal? Find out in our guide.

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: September 23, 2021

Once your mortgage has been approved and you’ve bought a property, you can still keep shopping around and make changes to your agreement if you want to. This includes fixed-rate mortgages, but what are the implications of refinancing a fixed-rate mortgage?

Remortgaging your property offers a way to take out another loan, that you could use to pay off your existing mortgage. You can remortgage at any time, though different types of mortgages vary, as do lender agreements.

When it comes to fixed-term mortgages, though it’s possible to remortgage during a fixed-rate period, there are important considerations that you should make.

Can I remortgage during a fixed-rate mortgage agreement?

Yes, you can, but you need to understand the implications before you make a decision. It’s possible to remortgage with your existing mortgage provider or switch to a new one. Whichever option you choose, it’s likely that you’ll have to pay fees for exiting your existing mortgage early.

There’s a possibility that the total sum of these fees may be more than the savings you would make from remortgaging.

These include:

  • Early exit fees: If you’re ending a mortgage contract early there are often fees equal to a percentage of the loan or amount being paid off.
  • Legal fees: You may need to enlist the help of a solicitor to oversee the remortgaging process. Many lenders also offer free legals and/or cashback deals to cover these costs.
  • Valuation: The new mortgage provider will want to see evidence of the value of the house so you’ll need to pay for a valuation, many lenders offer free valuations on remortgages as an incentive.

With this in mind, do the sums before you remortgage to be sure it’s worthwhile, or better yet, give us a call on 0808 189 2301 or make an enquiry and we’ll introduce you to an expert broker who can offer impartial advice and make sure you get the best remortgage deal available.

Remortgaging a 2-year fixed-rate mortgage

If your two-year fixed-rate mortgage agreement is coming to an end, it can be beneficial to remortgage so that you get the best available rate at the time. If you don’t refinance, your current lender may automatically switch you to a standard variable rate (SVR) mortgage with higher interest rates, although they might give you a courtesy call before your initial rates period comes to an end, in an attempt to lock you into another fixed-rate agreement.

Sticking with your current lender isn’t always the best option since shopping around could save you money – people often find that superior rates are on offer elsewhere. Most experts would suggest looking into the options at least three months before your contract ends. You can do this by contacting a mortgage broker. They’ll be able to assess your situation, search the entire market and recommend the best deal for you.

How to remortgage before a fixed-rate ends

First, contact your current mortgage lender to find out whether there will be any penalties for remortgaging during the initial rates period of your fixed-rate agreement. If there are, this will need to be factored into the overall cost of refinancing.

Next, speak to a mortgage broker who specialises in remortgaging. They can compare the entire market for you to see whether there’s money to be saved from switching to a new lender. If your current mortgage provider is offering the very best rates that you qualify for, your broker will be completely upfront about that and guide you through the process of refinancing with them.

If you were to remortgage during your initial rates period, you’d essentially be leaving your current fixed-rate mortgage early. You can read about the implications of this and the possible charges it can come with in our guide to exiting a fixed-rate mortgage early.

While you can remortgage at any time, most experts will only recommend doing so when the interest rates are lower than what you’re currently paying, unless you have a specific goal in mind, such as remortgaging to release equity.

Can I remortgage a buy-to-let during a fixed-rate agreement?

Yes, this could be possible, but it will be at the lender’s discretion. The interest you pay on buy-to-let mortgages is usually higher than for residential properties and remortgaging can be a way to find a better deal with less interest.

Remortgaging is often allowed, however, the costs can add up. It may be best to wait until the fixed-term period is over first. This is something you can discuss with a broker.

Can I change my mortgage to buy-to- let-during a fixed term?

Yes. For buy-to-let mortgages, there’s normally a minimum of six months before you can remortgage. Exit fees are usually applied on a sliding scale so the longer you leave it the less you’re likely to have to pay to get out of your current deal. The first thing you should do is speak to your lender and ask them if they will allow you to switch. If they agree they may offer you a new rate.

Dependent on how far into the mortgage you are, the new rates you’ll be offered will vary, as explained below. If, on the other hand, they decline, you can approach another lender.

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Which lenders offer a remortgage before the end of a fixed rate?

Most mortgage lenders will at least consider allowing you to remortgage, though not all will offer this if the deal is below a certain value or you’re less than six months into the agreement. Furthermore, many mortgage providers will charge you extra fees to exit your current fixed-rate mortgage. These fees can vary from lender to lender and the exact amount will likely depend on how long you have left in your initial rates period.

The key point to keep in mind about mortgage lenders in this situation is that you shouldn’t limit yourself to just one. Don’t take your current lender up on a remortgage that will lock you into a new fixed-rate with them, without comparing the entire market first. For exactly the same reason, it isn’t advised to approach any other lenders direct – there could be a better deal available elsewhere.

The only way to guarantee that you’re getting the best deal is to speak to a mortgage broker. They have access to the entire market and can compare remortgage products across it before matching you with the lender who’s best place to offer their top rates to you.

Speak to an expert

Deciding to remortgage your property is a major financial decision so before you go ahead with it, we advise that you speak to an expert about your financial situation and the implications of remortgaging, which will lead you to having more debts. Similarly, if you have any questions about how to remortgage before your fixed term is up, speaking to an expert can prove invaluable.

To get help finding one, give us a call on 0808 189 2301 or make an enquiry for a free, no-obligation chat and we’ll put you in touch with one of the expert brokers we work with.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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