Can You Remortgage on a Fixed Rate?

Many borrowers ask whether it is possible to remortgage on a fixed rate before the deal ends. The short answer is yes, but it can come with important costs and conditions. When considering a remortgage on a fixed rate, lenders typically look at timing, early repayment charges, and affordability. While switching early may sometimes make financial sense, it often involves fees that reduce potential savings. Understanding how these factors work together is essential before making any decisions.

Fixed rate mortgages provide stability by locking in an interest rate for a set period, usually two, three, five or even ten years. During this time, lenders expect borrowers to remain on the agreed deal. Exiting early can trigger penalties, which are designed to compensate the lender for lost interest.

Can you remortgage on a fixed rate before it ends?

Yes, it is usually possible to remortgage on a fixed rate before the term ends, but early repayment charges often apply.

Lenders generally allow borrowers to leave a fixed rate deal at any time, but doing so typically triggers an early repayment charge (ERC). This fee is often calculated as a percentage of the remaining mortgage balance and can vary depending on how far into the fixed term you are.

What are early repayment charges and how do they work?

Early repayment charges are fees applied when you repay your mortgage, or switch deals, before the fixed rate period ends.

ERCs are typically expressed as a percentage of the outstanding loan, such as 1% to 5%. The exact percentage often decreases each year of the fixed term, reflecting the reduced remaining commitment.

When might remortgaging on a fixed rate make sense?

Remortgaging on a fixed rate may make sense if the financial benefits outweigh any early exit costs.

One common scenario is when interest rates drop significantly after a borrower has locked into a higher fixed rate. Switching to a lower rate could reduce monthly payments, but the savings must exceed any ERCs and associated fees.

How do lenders assess a remortgage during a fixed term?

Lenders assess remortgage applications during a fixed term using affordability checks, credit history and property value.

What risks should you consider before switching early?

The main risks of remortgaging on a fixed rate include financial costs, reduced savings, and potential affordability challenges.

Are there alternatives to remortgaging early?

Yes, alternatives include waiting until the fixed rate ends or exploring product transfers with your current lender.

Frequently Asked Questions

Can I remortgage during a fixed rate period?

Yes, but most lenders apply early repayment charges if you leave the deal before the fixed term ends.

How much are early repayment charges?

They are usually between 1% and 5% of the remaining mortgage balance, depending on the lender and how far into the term you are.

Is it worth remortgaging before my fixed rate ends?

It depends on whether the savings from a new deal outweigh the costs of leaving your current mortgage early.

Can I avoid early repayment charges?

ERCs generally apply unless you wait until the end of the fixed term or stay within permitted overpayment limits.

Do I need affordability checks to remortgage?

Yes, most lenders will reassess affordability, income and credit history when you apply for a new mortgage deal.

This guide provides general information only. Personalised mortgage advice should always come from a regulated mortgage adviser authorised by the Financial Conduct Authority.