What to do before your 5-year fixed rate ends

In short Start looking six months before your current deal ends, and take advice rather than rolling onto your lender's standard rate. Richard Merrett, Managing Director of Alexander Hall, explains why securing an option early is a good idea, when overpaying is worth considering and how restructuring the term can help.

In this video Richard Merrett, Managing Director of Alexander Hall, with James Stevenson, Managing Director of Sales at Foxtons. Filmed at The Brentford Project by Ballymore.

How early should you start remortgaging?

James Stevenson: If someone's mortgage is coming to an end, let's say towards the end of this year, when should they start looking into their mortgage products?

Richard Merrett: As early as possible, and the key is to speak to a broker, take advice. We can start looking at securing an option six months before the end of your current deal, so we're already looking at people into 2027. What we're advocating is a plan for the worst and hope for the best mentality. The reason for that is we've seen interest rate volatility. This means you can secure something now, and if it gets worse, you're in a good place. If it gets better, we can help you change it onto something more favourable.

Should you overpay your mortgage before rates rise?

Richard Merrett: The other key point to make is that where rates are a little bit higher now, you might want to start giving consideration to whether you start making more inroads into the mortgage, making overpayments where it's allowable. Again, that's something you can speak to a broker about. The key thing will be to not simply bury your head in the sand and think that your only option is to stay with your existing lender. There's lots and lots of different things that you can do.

What if your mortgage payment is about to jump?

Richard Merrett: As well as addressing their mortgage options early, they can also be looking at the structure of the mortgage. If you're going from a low rate onto a higher one, there are options such as putting it over a longer term. That can mean paying more interest, but if your focus is to keep that jump up and the mortgage payment as low as possible, that's an option. You've also got interest-only, or part interest-only and part repayment, as an option. Again, for people who are going from a lower monthly payment onto something that is going to be higher, that can be a very sensible way of managing that jump up and then making greater inroads into the capital in the future.

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