/ Mortgages

What happens after my fixed rate mortgage ends (Mortgage management)

what is a fixed rate mortgage?

A fixed rate mortgage is essentially a mortgage where the interest rate is locked in for a set period of time.This is usually done as an introductory rate discount to attract new first-time buyers and provides certainty on monthly payments if interest rates rise. However if interest rates fall you will not benefit from this reduction in costs.

Fixed rates are different from tracker rates which move in line with the bank of England rate.

What you should do when your fixed rate mortgage ends?

Once a fixed rate mortgage ends you will usually move on to a standard variable rate. This rates are usually 3% higher than the fixed rate and can be increased or decreased at a lender's discretion.

Remortgaging at the end of a fixed rate will usually get you to a cheaper rate by shopping you out to all current lenders who will see you good history of mortgage repayments over the past few years and be eager to lend to you.

You can contact your lender first to see if they will offer you a better deal but you will be better served with a mortgage management platform which will analyse your possibilities and the best lender to switch to for the ultimate savings.

Mortgage management platforms will look into your equity in your property, if your property price has increased and the LTV ratio you will be using to approach mortgage lenders. A lower LTV will give you cheaper mortgage rates and hence less monthly payments.

It is worth noting that you will have to pass a mortgage lenders affordability test again and this will heavily affect on what sort of rates you are offered. A good mortgage management platform will ensure your complete affordability always stays at is best to ensure you are always eligible for the best mortgage rates.

In some cases your lender might wave the mortgage fees associated with a remortgage as a way to get you to get a new mortgage with them.This might not always be best for you and a good mortgage management platform will be able to analyse your total savings by comparing all possible outcomes.

What is a mortgage management platform?

A mortgage management platform is an AI powered hub which monitors your current mortgage to ensure you never overpay on your mortgage. It looks into factors such as your property price, your equity in your home, the cost of switching, your early repayment charges if any, your current mortgage including term & rate and provides insights on several possible outcomes where money can be saved in monthly mortgage repayments.This is a free service provided by your digital mortgage broker. This is an AI assisted service where a broker will notify you as soon as savings can be made.

In conclusion

You should always be on the lookout for mortgage savings to avoid overpaying on your mortgage.

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What happens after my fixed rate mortgage ends (Mortgage management)
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