Do nothing, and you roll onto the standard variable rate
Every mortgage deal has an end date. When a fixed or discounted rate finishes and you have not chosen anything new, the mortgage moves onto your lender’s standard variable rate, or SVR. The lender sets it, it can change at any time, and it tends to sit considerably above the rates on offer to someone choosing a new product. Most people who end up on an SVR did not choose it. They simply did not get round to choosing something else.
The exception worth knowing about
Occasionally, staying on the SVR for a short spell is the sensible answer. If you are about to move house, taking a new product can tie you into an early repayment charge you would then have to pay to escape. A month or two at a higher rate can cost less than a penalty on a deal you are about to leave. It turns entirely on the numbers and the timing, which is exactly the kind of question to put in front of an adviser rather than a calculator.
A product transfer is easy. It is also not advice.
Your existing lender will usually offer you a new product directly. It is quick, there is little paperwork, and there may be no fresh affordability assessment. But a product transfer is normally an information-only sale rather than an advised one: nobody is assessing whether it is the right answer for you. And because it all happens digitally, your lender is working from the picture it formed of you when you first borrowed. If your income, your household or your plans have moved on, that picture is out of date.
Why the wider market is worth a phone call
Lenders compete hardest for new borrowers. It is quite common — though never guaranteed — for the terms offered to a new customer to be comparable to or better than the transfer rates offered to an existing one. A whole-of-market adviser can set your lender’s offer beside thousands of other products and tell you, with your circumstances in front of them, which is genuinely better. Sometimes the answer is the transfer. The point is that you find out rather than assume.
Ask your lender how far ahead of the end of your deal you can reserve a new rate, and start the conversation then — not afterwards.
