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What to do when your fixed rate mortgage deal ends

Every month, hundreds of thousands of homeowners come to the end of their fixed rate mortgages. For some borrowers, this will mean that their monthly mortgage payments will increase – often by a large amount.

When you have a fixed rate deal, the interest rate will stay at a specific percentage for a fixed term of anything between two and ten years. For many borrowers, this helps to budget the household finances and keeps mortgage payments low.

If you don’t take any action once your fixed rate deal comes to an end, you will automatically revert to the lenders Standard Variable Rate, which is generally far higher than a fixed rate deal. If you would like to remain on a fixed rate deal, you should approach the lender a few months prior to the end of the contract.

If your circumstances have changed, for instance if the property value has increased, you may have more equity in your home and be eligible for a lower rate. A CeMAP qualified mortgage advisor will be able to help you find the most suitable mortgage deal. However, if you have undergone significant changes (perhaps your income has reduced, for example) lenders may not be willing to offer you a mortgage. Poor credit will also have a negative impact on your ability to obtain a mortgage.

Fixed rate deals often have a fee attached, which may be rather high, negating the benefits of a fixed rate deal. Before signing up to a new deal, it is important to consider all factors to ensure you make the right decision for you.

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