Did you know that you can't extend your fixed-term mortgage when it expires? This is why you shouldn’t let the fixed term lapse, or you could end up paying a higher standard variable rate.
Before it comes to an end you should weigh up your options, which could include:
- Refixing your loan: You can choose to re-fix your loan for a new fixed term, usually between one to five years. However, keep in mind that the interest rate may have changed significantly since you last fixed your loan.
- Getting a variable rate: You can switch to a variable rate, but your monthly payments may fluctuate.
- Refinancing your loan: You can refinance your loan with a new lender if you have enough equity in your property. You will need a property valuation for this loan.
- Splitting your loan: By signing up for a split loan, you can enjoy the benefits of both fixed and variable rate mortgages.
But what happens if you do nothing?
If you do nothing when your fixed term ends, your lender will likely switch your loan to the standard variable rate, which can be much higher than some of the discounted options available to new borrowers. So, it's essential to weigh all your options and seek professional advice from a mortgage broker to help you find the best deal.
Note: The information provided in this article is for general informational purposes only and should not be considered as professional advice. You should consult with a professional advisor, for your circumstances, before making any decisions regarding mortgage products.
