Coming to the end of your fixed rate or initial rate mortgage?

Coming to the end of your fixed rate or initial rate? What should you do?


The following post will discuss your options and is not financial advice, any questions please reach out.  (This post doesn’t take into account clients looking to vary their terms in anyway).

So, what options might be available with regards to fixed rates versus tracker rate mortgages?

First thing I would recommend looking at is what your current lenders variable rate is, as this is the rate that you’d go to once you come off the end of your initial rate.

Some lenders variable rates are typically a lot higher than what the initial rate will be, but that’s not always the case, so it’s worth checking.

Some clients may want to go on the lender’s variable rate while assessing options as interest rates can potentially drop, they might want to stay on that until they feel the time is right to move onto a new fix rate product. Apart from that, the main options are variable and fixed rate mortgages.

Tracker Products

At the end of 2022 tracker products were attractive (around the time of the dreaded mini budget) because they were just tracking the cost of borrowing at that time. The base rate has going up though and with fixed rate mortgages coming down recently there is definitely a lot to consider.

What you also need to consider here is the total cost of borrowing, for example arrangement fees, valuation fees, legal fees, broker fees as these products are typically short term as in for  two years and you might have some of those fees again after that initial term.

Fixed rate mortgages, again, similar options available there.

Some clients are choosing short term fixes with a view that rates might get better in a couple of years, while others looking for stability take on longer-term mortgages.

Another benefit of a longer-term mortgage is that you can spread the cost of borrowing over 5 to 10 years and things like arrangement fees can also be spread over that time.

As you can see there are lots of options to consider here.

A benefit of working with Freedom Financial is we look at all options available with your existing lender versus remortgaging to a new lender.

All findings will then be presented and discussed with you, pros and cons considered and then you can make an informed decision on which option suits you best.

Investing in Scottish property and want to discuss your options, book in a call with Freedom Financial.