Can You Extend A Fixed Rate Mortgage?
Your home may be repossessed if you do not keep up repayments on your mortgage.
If your fixed rate mortgage is coming to an end and you’re happy with the rate you’re currently paying, you may wonder if you can extend it. This guide will answer your queries so you can make the right move.
Fixed rate mortgages are favoured for being ‘fixed’. In other words, the interest you pay won’t go up or down depending on the Bank of England base rate, but rather remains the same throughout the term of your mortgage. However, the fixed rate will only apply for the term that you agreed upon when you first secured the loan. For example, your mortgage term may be 25 years, but you may have a three-year fixed rate. Once the three years is up, you will automatically transfer to a standard variable rate, SVR for short.
Should you wish to extend your fixed-term mortgage, you will need to speak to your current lender to see if they will extend. If they decline your request, it may be beneficial for you to seek a remortgage. You can see if another lender is able to match or improve the rate of interest on your current mortgage.
It’s important to remember that there are usually fees involved with transferring to another lender. It’s best practice to speak to a mortgage advisor as they will be able to advise on the best course of action, specifically whether you’d be better off on a standard variable or fixed rate with your current financial situation. They will also be able to find the right mortgage for you to help you save on cost or become mortgage free sooner depending on what’s important or right for you.