For many homeowners, especially foreign nationals in the UK, the end of a fixed-rate mortgage period can be confusing and sometimes very expensive if you are not prepared. Understanding exactly what happens and how to plan ahead can save you thousands of pounds.
What Happens at the End of a Fixed Rate?
When your fixed rate period ends, your mortgage automatically moves to what is called the lender’s Standard Variable Rate (SVR).
Here is what that means:
- The SVR is usually higher than your fixed rate.
- Monthly payments can increase by hundreds of pounds.
- The SVR can change at any time, because it is linked to the lender’s own decision rather than a fixed deal.
For example, one client we worked with was about to see their payments increase by £316 per month. By reviewing the market and switching them onto a new product, they avoided the increase and saved over £3,700 across the year.
Why Remortgaging Matters
The best way to avoid paying more is to remortgage. Remortgaging means moving onto a new mortgage product, either with your current lender or by switching to another lender.
By doing this, you can:
- Secure a lower and more competitive interest rate.
- Keep your monthly payments affordable.
- Lock in certainty for the next 2, 3, or 5 years depending on the product you choose.
- Potentially reduce the total interest you will pay over the life of your mortgage.
When Should You Start Looking at Remortgaging?
Most lenders allow you to apply for a new mortgage product three to six months before your fixed period ends. Starting early gives you time to:
- Compare lenders and products properly.
- Prepare your documents in advance.
- Avoid being rushed onto the SVR.
Many people wait until their payments increase before acting. This often costs them thousands of pounds unnecessarily.
Key Considerations for Foreign Nationals
If you are a foreign national, remortgaging works in the same way as for British citizens, but lenders may ask for additional information. Some of the key things they look at include:
- Residency status – for example Skilled Worker Visa, Spouse Visa, Graduate Visa.
- Time spent in the UK – many lenders prefer at least 12 months of residence.
- Deposit or equity – the more equity you have in your property, the better your chances of securing a low interest rate.
- Credit profile – having a UK credit history makes the process easier, but there are still options if your history is limited.
Common Mistakes to Avoid
- Letting your deal expire without planning ahead – this is the most common mistake that leads to higher costs.
- Going directly to your bank – many banks do not specialise in working with foreign nationals, so you may miss out on better options.
- Not reviewing your documents early – missing or incomplete paperwork can delay the process and cause you to fall onto the SVR.
Final Thoughts
Reaching the end of a fixed rate does not mean the end of your mortgage journey. It is simply the point where you need to review your options. By preparing early, working with a specialist broker, and finding the right remortgage product, you can save thousands of pounds each year and keep your monthly payments under control.
At First Time Finance, we work with foreign nationals every day to help them avoid unnecessary costs and secure the best possible mortgage deals.
Speak to us today to review your remortgage options and avoid paying more than you need to.
Talk to a Mortgage Specialist
