This guide explains how remortgaging during a fixed term works in the UK, what it tends to cost, and how to decide whether switching early is a smart move or just an expensive hobby.
Disclaimer: This article is for general information only and does not constitute financial advice. Mortgage suitability depends on your circumstances and lender criteria.
What does a fixed-rate mortgage really mean during a fixed term?
A fixed-rate mortgage locks your interest rate for a set period, commonly two or five years. Your monthly payment stays broadly predictable during that time, assuming no other changes like switching repayment type or changing the term. The trade-off is flexibility. Most fixed deals come with an early repayment charge (ERC) if you repay the mortgage or switch to another deal before the fixed period ends. Lenders use ERCs to protect themselves from you leaving a deal early when it no longer suits them.
ERCs are typically calculated as a percentage of your outstanding balance. The percentage often reduces each year you’re in the fixed term, but this varies by lender and product.
Can you remortgage during a fixed rate?
In most cases, yes. There’s rarely a rule saying you’re not allowed to remortgage during your fixed term. The real issue is whether you will be hit with costs that outweigh the benefits. If you switch early, you may face early repayment charges, exit or redemption fees, and potential legal and valuation fees for the new mortgage, plus a new product or arrangement fee. You will also go through checks for a new mortgage, such as affordability and credit checks, unless you choose a product transfer with your existing lender.
The three strategies homeowners usually choose
When you’re still in a fixed term, you’re typically choosing between one of three approaches.
1) Switch immediately and pay the ERC
This is the “rip the plaster off” route. It can be sensible if you’re making a big structural change, like releasing equity for a major expense, or if the new deal genuinely saves you money quickly enough to justify the fees.
2) Secure a new deal to start later
Many lenders allow you to apply for a remortgage ahead of your current deal ending, often up to around six months before. This can help you avoid drifting onto a standard variable rate while also giving you time to choose the right deal.
3) Wait and review closer to the end date
If the ERC is heavy and you’re not under pressure to change anything, waiting can be the simplest and cheapest option. Planning still matters, but you may not need to act immediately.
When remortgaging early might make sense
Most people do not remortgage early just to shave a few quid off the rate. The cases where it can make sense tend to have a bigger reason behind them.
You need to release equity for a specific purpose
Common examples include home improvements, supporting a major life change, or consolidating debts into a single payment. This is not automatically good or bad, but it is a real reason people explore early switching. If debt consolidation is part of your thinking, it’s worth reading Finance4Homes’ advice on consolidating debt into your mortgage.
Your circumstances have changed since you took the deal
Life is not a tidy spreadsheet. If your income, employment type, or household situation has changed, you might be looking for a different mortgage structure, not just a lower rate.
You’re approaching the end of the fixed term and want to avoid SVR
This is the most common “early” move, and it’s usually the least dramatic. Rather than switching years early, you’re simply planning so your next deal starts immediately after the current one ends.
When it usually does not add up
If you’re in the first year or two of a fixed term, ERCs can be chunky. Add fees, and it becomes harder to justify switching purely for rate reasons. Early remortgaging often fails for one of these reasons: the ERC wipes out savings for a long time, the borrower plans to move home before breaking even, a product transfer would have been simpler and similarly priced, or the borrower has recently changed jobs or income and does not meet a new lender’s affordability checks. None of this means you should never explore it. It simply means you should explore it with the maths turned on.
How to calculate your break-even point
Here’s the practical bit competitors often mention, but rarely spell out clearly.
Step 1: Add up the costs of leaving
This might include the ERC and any exit or redemption fee.
Step 2: Add up the costs of starting the new deal
This might include the mortgage product or arrangement fee, valuation fee if not free, legal fees if not covered by the lender, and a broker fee if applicable.
Step 3: Work out your monthly savings
Compare your current monthly payment to the estimated new payment.
Step 4: Calculate break-even in months
Break-even months = total switching costs ÷ monthly savings. If it takes you 24 months to break even and your fix ends in 10 months, you’ve got your answer.
A quick example (numbers purely illustrative)
Total costs to switch: £4,000. Monthly savings: £150. Break-even: 4,000 ÷ 150 = 26.7 months. If you won’t keep the new deal for at least 27 months, it’s unlikely to be worth it on cost grounds alone.
Product transfer vs switching lender
If you’re still in a fixed term, the simplest alternative to a full remortgage is often a product transfer. A product transfer means taking a new deal with your existing lender rather than switching lenders entirely. It can reduce paperwork, shorten timescales, and cut fees. But it may also limit you to whatever rates your lender is offering.
| Option | Typical benefits | Typical downsides | Best for |
| Product transfer (same lender) | Often quicker, fewer fees, less admin | Limited choice, not always the best rate | People who value simplicity or have complex income or credit |
| Full remortgage (new lender) | Wider deal selection, potential incentives | More checks, more admin, fees can add up | People who want maximum choice and can afford it |
A good broker will compare both routes side by side, rather than assuming one is better.
What to gather before you start shopping for deals
You don’t need to become a mortgage detective, but having the right info to hand makes the process smoother.
- Fixed rate end date
- ERC amount and how it changes over time
- Current mortgage balance
- Current interest rate and monthly payment
- Estimated property value
- Income details and any changes since you took the mortgage
- Any credit issues since taking the mortgage
If you’re unsure about affordability checks and timescales, our guide on how long mortgage approval can take is a handy reality check.
If your credit history has changed since you fixed
A lot can happen in two or five years. If your credit profile has worsened since you took the deal, switching to a new lender might be harder or more expensive, even if rates elsewhere look tempting. If that sounds familiar, you’ll want our guide on remortgaging with bad credit history. It’s not about doom and gloom. It’s about being realistic on options, and choosing the route that fits your situation rather than the one that looks best on a comparison table.
Buy to let: what changes?
If the property is buy-to-let, lenders often focus more heavily on rental coverage and stress testing than on personal income. ERCs still apply, fees still apply, and product transfer options can vary. Planning tends to matter even more because a delay can mean rolling onto a pricier rate with less flexibility.
Timing matters: avoid drifting onto a higher variable rate
A quiet mortgage mistake is doing nothing until your fixed rate ends, then landing on your lender’s standard variable rate. You may be able to avoid that by starting the conversation months in advance. For general consumer guidance, the Financial Conduct Authority provides a clear overview in its mortgage guidance for consumers. For context on interest rate changes, the Bank of England’s official Bank Rate page is the sensible place to look.
How Finance4Homes fits into the picture
If you’re weighing up switch early vs wait vs product transfer, the hard part is rarely understanding the concept. The hard part is applying it to your real numbers and your real life, without accidentally paying thousands to save pennies.
Finance4Homes supports UK homeowners through mortgages and remortgages, including cases that are not perfectly tidy on paper. If you’re approaching the end of a fixed term, considering switching early, or you simply want a clear view of what your options look like, take a look at Finance4Homes’ mortgages and remortgages service and see what your next best move could be.