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Remortgaging Before the End of a Fixed Rate Term

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

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: May 17, 2022

There are many reasons why you might want to refinance a fixed-rate mortgage before the end of the introductory rates period. Perhaps you want to switch lenders or take advantage of lower interest rates that might be available? Whatever the reason, we’re here to help!

In this guide, we’ll tell you whether it’s possible to remortgage your fixed-rate agreement early, what the implications of doing this are likely to be, and how to get the best remortgage deal.

Can you remortgage a fixed-rate mortgage early?

Yes, and by ‘early’ we mean during the introductory rates period of a fixed-rate mortgage, which would usually last between two and five years, sometimes longer. It’s possible to refinance with your existing mortgage lender or switch to a new one, but there are implications to remortgaging during a fixed-rate term to be aware of before pressing ahead with your plans.

Implications of refinancing before a fixed rate ends

The main consequence is having to pay fees for leaving your existing deal early.

There are several charges that you might be liable for and they are as follows…

  • Early exit fees: By remortgaging you’d be ending your mortgage contract early, which often means there are fees equal to a percentage of the loan amount to pay. The longer you have left to go in your fixed rate period, the higher the fee is likely to be.
  • Legal fees: There are circumstances where you might need to find a solicitor to oversee the remortgaging process, such as moving to a new lender, for example. Many mortgage lenders do, however, offer free legals and/or cashback deals to cover these costs.
  • Valuation fees: If you’re moving to a new lender, the new mortgage provider will want to see evidence of the value of the house, so you might need to pay for a valuation survey. Many mortgage lenders offer free valuations on remortgages as an incentive.

Be sure to find out whether any of these fees might apply before you go ahead with a remortgage so you can factor them into the overall cost.

One of the main benefits of using a remortgage broker is that they can make sure you’re aware of every potential cost involved and help you keep these charges to a minimum by matching you with a mortgage lender who waives certain fees as an incentive.

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How to remortgage during a fixed-rate term

Here are the steps to take if you want to remortgage during a fixed-rate term…
1

Find out whether any exit fees apply:

Speak to your mortgage lender or check your paperwork to find out whether your current deal has exit fees. Most do, but you should find out exactly how much you’ll need to pay so it can be factored into the overall cost

2

Let us match you with a remortgage broker:

We offer a free broker-matching service that will pair you with a remortgage advisor who specialises in fixed-rate remortgages. Their knowledge and experience of these agreements could help you save time, money and potential disappointment in the long run, as well as avoid unnecessary fees.

3

Sit back while your mortgage broker does the rest:

The broker we match you with can offer you expert advice throughout the remortgage process and will start by making sure you’re aware of the implications of refinancing early. They will also search the entire market for you to track down the best deal that you qualify for, one that will leave you better off financially with any exit fees and other charges factored in.

The remortgage brokers we work with have deep working relationships with mortgage lenders across the market and can negotiate the most favourable interest rates and deal on your behalf. Remember, the best mortgage you qualify for might only be available through a lender you’ve never heard of, or a mortgage provider who is only approachable through a specialist broker.

Make an enquiry and we’ll match you with a remortgage specialist so you can get started.

Common misconceptions about remortgages

  1. Sticking with your current lender is the best option: Bank loyalty is one of the main reasons people fail to get the best deal available. Many homeowners who are remortgaging think they’ll get preferential treatment or special rates for sticking with the same lender, when in fact there’s no guarantee you won’t get a better deal elsewhere.
  2. You shouldn’t remortgage if it means paying exit fees: Learning that they have to pay exit fees to leave a fixed-rate mortgage often puts people off remortgaging, but don’t think of them as an automatic deal-breaker. Exit fees should be factored into the overall cost of a remortgage. If there’s a deal out there with a better rate, the long-term savings you make might still leave you in pocket, even with the exit fee included in the equation.
  3. You don’t need a broker to remortgage: This is another misconception that can cost people a lot of money. Some believe that using a broker to refinance is overkill, but their knowledge, expertise and whole-of-market access is often the difference between landing the best deal available and having to settle for high rates with your current lender or one you’ve selected at random on the high street or through a quick Google search.
  4. Finding a remortgage yourself is quicker: Again, not strictly true. Our free broker-matching service will connect you to a mortgage advisor before you know it and they have the entire market at their fingertips. They will save you the legwork of having to search for the best deal, help you complete the paperwork and make sure there are no unexpected setbacks by introducing you to the right lender, first time.

Remortgaging a fixed-rate buy-to-let property

It’s possible to remortgage a buy-to-let property during the initial rates period of a fixed agreement, but this will be at the lender’s discretion. The interest you pay is usually higher than for residential properties and refinancing can be a way to find a better deal with less interest.

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.

Depending 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, but it’s a good idea to speak to a mortgage broker for expert advice before pressing ahead.

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Key takeaways from this guide

  • 01

    You can remortgage a fixed-rate mortgage early:

    But expect to pay exit fees and potentially foot other costs as well. This is likely to be the case regardless of whether you’re remortgaging with your current lender or hoping to switch to another one.
  • 02

    A remortgage broker can help you save time and money:

    The right advisor can help you avoid paying unnecessary fees and make sure you end up with the best remortgage deal you qualify for. In short, they can save you time, money and potential heartache.
  • 03

    We can match you with the right broker for free:

    Our free broker-matching service will pair you with the advisor who’s best placed to get you a great remortgage deal. After an assessment of your needs and circumstances, it will match you with a broker who specialises in helping people exit a fixed-rate mortgage and refinance onto a better deal.

Call 0808 189 2301 or make a quick enquiry online and we’ll set up a free, no-obligation chat between you and your ideal remortgage broker today.

FAQs

When should I remortgage a two-year fixed-rate deal?

Ideally you’ll want to make an enquiry about remortgaging several months before you’re due to revert to your lender’s standard variable rate, as this is likely to be more expensive. Most lenders contact their customers when their fixed rate is soon to expire to upsell a remortgage.

But you can shop around for a better deal at any point during a two-year fixed-rate mortgage. Just be sure to check with your mortgage provider to find out how much you’ll need to pay in exit fees and factor that into the overall cost of refinancing.

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

Most mortgage lenders will at least consider allowing you to remortgage during a fixed-rate period, 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 is that you shouldn’t limit yourself to just one lender. 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.

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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects.

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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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