Mortgage Deal Ending Soon? Should You Remortgage or Stay With Your Current Lender?
If your fixed-rate mortgage is coming to an end, you’re probably asking yourself one important question:
Should I stay with my current lender or look for a better deal elsewhere?
It’s a question we help homeowners answer every day.
While many borrowers assume that switching lenders will always save them money, the reality is often more complex. The right choice depends on your mortgage balance, future plans, available rates, and how much you value convenience.
Recently, we spoke with a client whose mortgage deal was due to expire. Their situation highlights exactly why it’s worth reviewing your options before your current deal ends.
Don't Automatically Accept the First Offer
When a mortgage product comes to an end, most lenders will contact you with new rate options. In many cases, they’ll offer a straightforward product transfer, allowing you to move onto a new deal without changing lenders.
This can be a great option because:
- The process is usually quick and simple
- There’s often very little paperwork
- You may not need to provide income documents
- Completion can happen much faster than a full remortgage
However, that doesn’t necessarily mean it’s the most cost-effective option.
Before making a decision, it’s always worth comparing what’s available across the wider mortgage market.
How much could you save by remortgaging?
In this particular case, our client’s existing lender offered a new fixed-rate deal, but we also checked alternative lenders to see if there were any better options available.
The wider market did offer slightly lower rates, resulting in a saving of around £20 per month.
At first glance, any saving sounds worthwhile. However, over a two-year fixed period, that equated to less than £500 in total savings.
When we discussed the figures with the client, they decided that the additional paperwork, affordability checks and application process involved in switching lenders weren’t worth the relatively modest saving.
Instead, they chose to remain with their current lender and secure a new deal through a product transfer.
The key takeaway?
The cheapest interest rate isn’t always the best overall solution.
A good mortgage adviser will help you look beyond the headline rate and consider the bigger picture.
Should You Choose a 2-Year or 5-Year Fixed Rate?
Another common question homeowners face is whether to choose a shorter or longer fixed-rate deal.
There isn’t a one-size-fits-all answer.
A 2-year fixed rate may be suitable if:
- You expect your circumstances to change in the near future
- You may move home
- You want flexibility
- You believe rates could improve over the next few years
A 5-year fixed rate may be worth considering if:
- You prefer payment certainty
- You want protection against future rate rises
- You don’t expect to move home
- You value long-term budgeting stability
In our client’s case, they were considering selling their property within the next few years. Because of that uncertainty, a shorter fixed-rate deal made more sense than committing to a longer term.
Your future plans should always play a major role in your mortgage decision.
Have Your Circumstances Changed Since Your Last Mortgage Review?
Many homeowners only think about their mortgage when their fixed rate ends.
However, a lot can change over the course of two, three or five years.
You may have:
- Received a pay rise
- Changed jobs
- Started a family
- Reduced other debts
- Built up additional savings
- Made mortgage overpayments
All of these factors can affect the options available to you.
That’s why a mortgage review should be about much more than simply choosing a new interest rate.
Don't Forget About Your Protection Policies
One of the most valuable parts of a mortgage review is checking that your protection arrangements still meet your needs.
When many people first buy a home, they take out:
- Life insurance
- Critical illness cover
- Income protection
Then they rarely look at those policies again.
As your mortgage balance reduces and your circumstances change, it may be worth reviewing your cover to ensure you’re still getting the right level of protection at a competitive price.
In the case above, our client wanted to revisit the insurance policies they arranged when they first took out their mortgage. A simple review can often highlight opportunities to improve cover or reduce costs.
Have You Been Overpaying Your Mortgage?
Another important discussion point was mortgage overpayments.
Our client had been making regular overpayments for several years but wasn’t entirely sure what their outstanding balance was.
Overpayments can have a significant impact on your mortgage by:
- Reducing your balance faster
- Lowering the amount of interest, you pay overall
- Potentially helping you access better rates
- Shortening your mortgage term
If you’ve been making overpayments, it’s worth factoring this into your next mortgage review.
A lower mortgage balance could place you in a better loan-to-value bracket, potentially unlocking more competitive products.
Why Professional Mortgage Advice Matters
With hundreds of mortgage products available, finding the right deal isn’t always straightforward.
The lowest rate isn’t necessarily the cheapest option once fees, incentives and your future plans are taken into account.
At Active Mortgages, we take the time to understand your circumstances before making a recommendation.
We’ll compare your current lender’s offer against products available across the wider market, explain the pros and cons of each option, and help you decide whether it’s worth switching or staying put.
Mortgage Deal Ending Soon? Let's Talk
If your mortgage deal is due to expire within the next six months, now is the ideal time to start reviewing your options.
Whether you’re looking to secure a new deal with your current lender, explore remortgage opportunities, review your protection policies or simply understand what’s available, we’re here to help.
Contact Active Mortgages today and let our experienced advisers help you find the mortgage solution that’s right for you.
