What Happens When Your Fixed Rate Mortgage Ends

Picture this: you’re cruising along with your monthly mortgage payments, same amount every month, completely manageable. Then your fixed rate mortgage ends, and suddenly your lender wants an extra £300 a month. That’s the reality facing 1.6 million UK households whose fixed rate deals ended in 2025, with another 2 million facing similar increases by the end of 2026, according to Tembo.

When your mortgage deal finishes, you’ve got decisions to make. Do nothing, and your payments jump. Act early, and you might lock in a rate that saves you thousands over the next few years.

What Actually Happens When Your Fixed Rate Mortgage Expires

When your fixed rate mortgage expires, your lender automatically moves you onto their Standard Variable Rate (SVR). You don’t need to do anything for this to happen. Your mortgage doesn’t disappear, but the interest rate does change.

The SVR is almost always higher than fixed rates. In February 2026, the average SVR across all UK lenders sits at 7.27%. Compare that to the average two-year fixed rate of 4.23%, and you’re looking at a substantial difference.

On a £200,000 mortgage over 25 years, moving from a 4% fixed rate to a 7.27% SVR increases your monthly payments from £1,056 to £1,428. That’s £372 more every month, or £4,464 a year, based on Moneyfacts calculations.

Your Three Options

Stay on the SVR

You can do nothing and remain on your lender’s SVR. The rate can change at any time, at the lender’s discretion. While it typically follows the Bank of England base rate, lenders can increase it whenever they want without providing a reason.

There are situations where staying on an SVR temporarily makes sense. If you’re planning to move house within the next few months, the flexibility might be worth the higher cost since you won’t face early repayment charges. If you’re close to paying off your entire mortgage, paying a higher rate for a short period might be simpler than arranging a new fixed deal.

But for most people, the SVR is expensive. Moneyfacts calculates that remortgage customers moving off an SVR of 7.25% to a two-year fixed rate at 4.28% could save over £5,000 in repayments over one year on a £250,000 mortgage over 25 years.

Switch to a New Deal With Your Current Lender

Your existing lender might offer you a new fixed rate deal. Because they already know your financial situation, the process is often quicker than switching to a new lender. Some lenders reserve special rates for existing customers.

You’ll still need to go through affordability checks, but you typically won’t need a new property valuation if you’re not borrowing more money.

Remortgage to a Different Lender

Shopping around often gets you better rates. Different lenders compete for business, which means you might find deals your current lender can’t match.

Remortgaging to a new lender takes longer than switching products with your current one. The process can take up to three months, according to StepChange. You’ll need to complete a full application, provide proof of income, bank statements, and proof of address and ID.

When to Start Looking

Start the remortgage process six months before your current deal ends. This gives you time to compare rates, complete applications, and get everything approved before your fixed rate expires.

Most lenders let you lock in a rate up to six months in advance. Some will even allow you to switch to a lower rate if their prices drop before your new deal starts, though you should check this with individual lenders.

If you wait until the last minute, you risk landing on the SVR while your new mortgage application is being processed. Even a few weeks on an SVR can cost you hundreds of pounds.

Your lender should contact you three to six months before your deal ends to discuss options. But don’t wait for them to get in touch. Take control of the timeline yourself.

Understanding Current Market Rates

Mortgage rates have fallen substantially from their 2023 peaks but remain higher than the ultra-low rates available between 2020 and 2022.

As of February 2026, average rates according to Rightmove and Moneyfacts data are:

• Two-year fixed rate: 4.23% – 4.83%
• Five-year fixed rate: 4.34% – 4.91%
• Standard Variable Rate: 7.25% – 7.27%

If you locked into a fixed rate mortgage in February 2021 when rates averaged 2.64%, your monthly payments will increase significantly when you remortgage in 2026. On a £200,000 mortgage over 30 years, you’d move from £813 per month at 2.64% to £985 per month at 4.34%, an increase of £172 monthly.

The best rates are reserved for borrowers with higher equity. Lenders offer their lowest rates to borrowers with a loan-to-value (LTV) ratio of 60% or less, meaning you own at least 40% of your property’s value.

Early Repayment Charges and Timing

Most fixed rate mortgages include Early Repayment Charges (ERCs) if you leave before the term ends. These charges typically range from 1% to 5% of the outstanding loan amount, decreasing each year you’re into the deal.

On a £250,000 mortgage, a 3% ERC would cost £7,500. For most people, paying this fee to switch early doesn’t make financial sense unless you can secure a dramatically lower rate.

ERCs usually end when your fixed term expires. Once you’re on the SVR, you can switch to a new deal without penalty. This is why starting your search six months before your deal ends works well. You can line up a new mortgage to start the day your current deal finishes.

Many fixed rate mortgages allow overpayments of up to 10% of the mortgage balance per year without triggering ERCs. If you can afford to pay more than your monthly amount, this reduces the total interest you’ll pay over the mortgage term.

The Impact of Your Credit Score

Your credit score determines which mortgage deals you can access. Lenders use it to assess how risky it would be to lend to you, and your score directly affects the interest rates you’re offered.

A strong credit score opens access to more competitive fixed rate mortgage deals with lower interest rates. A poor credit score limits your options and typically means higher interest payments.

Check your credit report before your fixed rate mortgage ends. Look for errors or inaccuracies that could drag your score down. Even small mistakes can affect the deals lenders offer you. You can access your credit report for free through services like Experian, Equifax, or TransUnion.

If you’ve had money problems recently, finding a new deal becomes harder. This is another reason not to wait until the last minute to start your remortgage process.

Additional Ways to Manage Higher Payments

If your monthly payments are set to increase significantly, you have options beyond just accepting higher costs.

Extend your mortgage term: Adding years to your repayment period reduces monthly payments but increases the total interest paid over the life of the mortgage. On a £200,000 mortgage at 4.5%, extending from 20 to 25 years reduces monthly payments from £1,266 to £1,111, saving £155 per month. However, you’ll pay an extra £33,300 in interest over the additional five years.

Switch to interest-only: With an interest-only mortgage, you pay only the interest each month, leaving the capital debt unchanged. This substantially lowers monthly payments but means you’ll need a plan to repay the full loan amount at the end of the term. This option requires lender approval and typically needs you to demonstrate how you’ll repay the capital.

Make use of mortgage payment holidays or reduced payment schemes: Some lenders offer temporary relief if you’re struggling. The Mortgage Charter agreed between lenders and the government, includes a 12-month grace period before repossessions can start and options for borrowers facing difficulty.

The Role of Mortgage Brokers

A mortgage broker searches the entire market on your behalf. They have access to deals you might not find on comparison websites, and some lenders only work through brokers.

Brokers understand the affordability criteria different lenders use. If your circumstances are complicated (self-employed, contractor work, previous credit issues), a broker knows which lenders are more likely to approve your application.

Many brokers charge no fee for remortgage advice, earning their commission from the lender instead. Fee-free services like L&C will search the market and handle your application without charging you directly.

A good broker will also monitor rates between when you apply and when your current deal ends. If rates drop, they can potentially move you to the new lower rate before your mortgage starts.

What Happens If You Do Nothing

If you take no action when your fixed rate mortgage ends, you automatically move to the SVR. There’s no application process, no credit check, no paperwork. Your mortgage continues, just at a different interest rate.

This sounds simple, but it’s almost always expensive. The average SVR is currently around 7.27%, while fixed rates average around 4.3% to 4.9%, according to Moneyfacts and Rightmove February 2026 data.

On a typical £250,000 mortgage, that difference costs you over £400 extra per month. Over a year, you’d pay nearly £5,000 more than if you’d remortgaged to a fixed rate.

The SVR can also change at any time. If the Bank of England increases the base rate, or if your lender simply decides to raise their SVR, your payments increase with no fixed end date for the higher rate.

2026 Rate Predictions and Strategy

Most UK economists predict the Bank of England base rate will settle around 4.00% to 4.25% throughout 2026, according to economic forecasts. This suggests two-year fixed mortgages will likely settle in the 4.3% to 4.8% range.

Moneyfacts analysis suggests if average mortgage rates reach 4.3% in 2026, a typical borrower taking out a fixed rate mortgage will be around £38 per month (£456 per year) better off for every £100,000 borrowed over 25 years, compared to rates at the end of 2025.

Waiting for rates to drop back to the 1-2% levels seen in 2020-2021 is unrealistic. The consensus among financial experts is that we’ve entered a “new normal” of higher borrowing costs. The days of ultra-low rates are unlikely to return in the near future.

The choice between a two-year and five-year fixed rate depends on your circumstances. Two-year fixes offer flexibility if rates fall further, allowing you to remortgage again sooner. Five-year fixes provide longer-term payment certainty, which helps with long-term budgeting.

In February 2026, five-year fixed rates (averaging 4.34%) are only slightly higher than two-year rates (averaging 4.23%), making longer-term deals relatively attractive for those who value stability.

Frequently Asked Questions

Q1:Can I change my fixed rate mortgage to a variable rate?

Yes. Once your fixed term ends, you can choose any type of mortgage product, including tracker mortgages that follow the Bank of England base rate or discount variable rate mortgages. Variable rates offer flexibility since you can switch or pay off the mortgage early without early repayment charges. However, your payments can increase if rates rise.

Q2: What if my property value has decreased?

If your property value has fallen since you took out your mortgage, your loan-to-value ratio increases. This might push you into a higher LTV bracket, which typically means higher interest rates. Lenders reserve their best rates for borrowers with at least 40% equity (60% LTV or less). You might need to wait longer to build more equity before accessing the best deals, or accept a slightly higher rate than you’d hoped for.

Q3: Should I fix for two years or five years?

This depends on your circumstances and risk tolerance. A two-year fix gives you flexibility to remortgage again sooner if rates fall, while a five-year fix provides longer payment certainty. In February 2026, the rate difference between two-year and five-year fixes is minimal (around 0.11%), making five-year deals attractive for those who want to lock in stability. Consider your future plans: if you might move house or need flexibility, a shorter fix might suit you better.

Q4: Can I remortgage if I’m self-employed?

Yes, but you’ll typically need two to three years of accounts or tax returns to prove your income. Self-employed applicants often face stricter affordability checks than employed borrowers. Some lenders specialise in self-employed mortgages and understand variable income patterns better than high street banks. A mortgage broker can direct you to lenders more likely to approve your application.

Q5: What happens if I miss the deadline to remortgage?

You’ll automatically move onto your lender’s SVR, which will cost you significantly more each month. However, you can still remortgage from the SVR at any time without early repayment charges. The application will take several weeks to complete, so you’ll pay the higher SVR rate during this period. This is why starting six months early matters. Missing the deadline by even a few weeks can cost you several hundred pounds.

Q6: Do I need a new property valuation when remortgaging?

If you’re remortgaging to a different lender, they’ll usually require a property valuation to confirm the current value and calculate your loan-to-value ratio. If you’re switching products with your existing lender and not borrowing additional money, you often won’t need a new valuation. Desktop valuations are common for remortgages and cost less than full surveyor visits.

Q7: Can I remortgage to borrow more money?

Yes, this is called remortgaging for additional borrowing. You can use the extra money for home improvements, debt consolidation, or other purposes. The lender will reassess your affordability based on the higher loan amount. You can do this with your current lender or switch to a new one. Some borrowers take out a second mortgage with a different lender while keeping their main mortgage where it is, though this is less common.

Q8: Are there any fees when remortgaging?

Most remortgages involve several fees: arrangement or product fees (typically £999 to £2,000), valuation fees (£0 to £500, sometimes free), legal fees (often free for straightforward remortgages as lenders cover basic legal work), and potentially broker fees (many brokers charge nothing for remortgage advice). When comparing deals, calculate the total cost including fees, not just the interest rate. A low-rate mortgage with a £2,000 fee might cost more over two years than a slightly higher rate with no fee.

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