If your mortgage deal is ending: a seven-step plan
Start with your position, not a lender's product list. A remortgage decision combines rate, fees, term, loan-to-value, affordability and how long you expect to keep the next deal.
Step 1 - build your mortgage snapshot
Gather the current balance, interest rate, monthly payment, remaining term, deal-end date, repayment type, property value and any early repayment charge. Use the latest statement where possible.
Step 2 - understand what happens if you do nothing
Find the follow-on rate or standard variable rate that would apply when the current deal ends. Estimate the resulting payment. This becomes the baseline against which other options should be compared.
Example
A £220,000 repayment mortgage has 22 years remaining. The fixed rate ends in four months. The key comparison is not simply today's 2.1% rate against a new rate. It is the payment and cost of the lender's follow-on rate versus the realistic alternatives available at the point of switch.
Step 3 - compare all realistic routes
Consider a product transfer with the existing lender, a remortgage to another lender, staying temporarily on the follow-on rate, and changing the term or repayment structure where appropriate. Each route changes fees, administration, affordability checks and flexibility.
Step 4 - compare total cost over the period you expect to keep the deal
Include product fees, legal fees, valuation costs, cashback, early repayment charges and any fee added to the loan. A lower headline rate can lose its advantage if the fee is high and you only keep the deal for a short period.
Things to consider
- Loan-to-value after a realistic property valuation
- Whether a fee is paid upfront or added to the mortgage
- Overpayment limits
- Portability if you might move
- Early repayment charges
- Whether shortening or extending the term changes total interest materially
Step 5 - stress-test the next payment
Calculate the payment at the proposed rate and at one or two higher rates. This does not predict where rates will go. It shows whether the household budget remains resilient if the next refix is less favourable.
Step 6 - protect liquidity as well as reducing interest
A large mortgage overpayment can reduce interest, but accessible cash may be valuable for emergencies and moving costs. Compare the interest saved with the effect on your emergency reserve.
Step 7 - verify the final decision
Mortgage eligibility, affordability and product suitability depend on individual circumstances and lender criteria. Check the lender's current terms and consider regulated mortgage advice where appropriate before committing.