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Rate fixed for 5 years - what happens afterwards?
jumperabv3
Posts: 1,231 Forumite
So I'm new to how mortgages work, and I've completed my (re-)mortgage just a few days ago - my mortgage is fixed for 5 years ... I'm wondering what happens after 5 years? Can I ask the same lender to fix the rate for another 5 years? Is it an easy process to update/fix the rate or is it going to be another new procedure just like applying for a new mortgage?
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Comments
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Before the fixed term ends your lender will write and notify you of same. You'll be able to go online and select a new product from those available. If you don't select a new product, by default you'll drop onto your lenders SVR or the rate as specified in your current product contract .
This is not a remortgage. Requires no underwriting if performed online. If however you do contact your lender for advice they are required to perform affordability checks.1 -
Adding to the above - to be clear, you don't have to go with your existing lender - you can apply to new lender at the end of your fix if they're offering a better rate/deal... but that will include paperwork/costs/fees, so you need to factor that into any calculations.
That sounds like a classic case of premature extrapolation.
House Bought July 2020 - 19 years 0 months remaining on term
Next Step: Bathroom renovation booked for January 2021
Goal: Keep the bigger picture in mind...1 -
Thanks for your help and sorry for responding after 2 days, I was away too busy with too many issues like many of us (COVID19 related).Thrugelmir said:Before the fixed term ends your lender will write and notify you of same. You'll be able to go online and select a new product from those available. If you don't select a new product, by default you'll drop onto your lenders SVR or the rate as specified in your current product contract .
This is not a remortgage. Requires no underwriting if performed online. If however you do contact your lender for advice they are required to perform affordability checks.
My lender doesn't provide any online platform (bmmortgages.co.uk) - so how would I be able to "choose" something online if there is no online platform? Will it simply be done over the phone or via post?
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Is your mortgage a BTL?0
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Yes.Thrugelmir said:Is your mortgage a BTL?1 -
Ah! Disregard my previous comments then.
You'll need to contact a mortgage broker. As BM do not deal direct with clients.1 -
Got it, thanks!!Thrugelmir said:Ah! Disregard my previous comments then.
You'll need to contact a mortgage broker. As BM do not deal direct with clients.0
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