What happens at end of fixed term - any tips please

pickledonionspaceraider

Good afternoon all,

We were FTB five years ago...and our fixed term ends this year

We don't know the process / what to do at this point

Does the bank contact us?
Do we have to stay with the same people?

and

we have done some home improvements which should increase the value, do we need to get a valuer out again?

Is there anything else we need to know?


Thanks in advance

foxy-stoat

Call your lender a few months before its due and see what their new fixed deals are. If affordable and acceptable then you can fix it again with minimal effect. Ask them what they think its worth through index linking and go from there.

If you want to go to the market then you can.

If you have added floor space then it may well have increased the value, but if your LTV isn't on the threshold of cheaper rates I wouldn't worry too much.

kingstreet

Do nothing and roll onto your current lender's "follow-on" rate - they will write and confirm this

or

Ask your lender about a customer retention product - they will normally write and confirm your options

or

Consider a remortgage. This is a new mortgage with a new lender to replace the current mortgage.

The first two options will see your property re-valued by desktop valuation.

The third probably by a drive-by or internal inspection by a surveyor. You will need to estimate the value beforehand though.

A broker can compare the customer retention and remortgage options for you.

Moneyminded

You current lender should contact you a few months before the end of your deal to notify you that your fixed term is coming to an end and if you do nothing you will move onto their follow on rate. Assuming you intend to stay in the house, don't allow yourself to move onto the follow on rate it will typically add interest.

Over the 5 years you will likely have dropped into a lower LTV bracket and could secure a better interest rate/ deal. Think about how long you would like to fix your deal for this time, was 5 years good for you or would you prefer longer/ shorter period.

Speak to your current provider to see what rates they can offer you and do some research online to see how competitive this is. If you are happy with the service over the last 5 years and the rate they offer you is decent it is often easier to stay with your existing provider.

Bear in mind if you find a good rate elsewhere you can switch but you may need to pay legal fees and valuation fees.