The Switch and Fix Re-mortgage

Catherine Alexander
Partner

We are all familar with choosing either a fixed rate or one of the types of variable rates when it comes to selecting a re-mortgage deal, but the ‘switch and fix’ product may be new to you. Lenders sometimes create new types of products to ensure that they have products that suit a wide variety of needs and circumstances.

A switch and fix re-mortgage offers you, as a homeowner, the ability to take a tracker remortgage at a lower rate than a fixed rate and stay on the tracker for anytime they want, even the entire term. However, should they see rates rising by the Bank of England and want more security in a fixed rate they are allowed to switch to a fixed rate (available at the time) without any penalties and fees. It is basically a re-mortgage that may offer the best of both a tracker and a fixed rate to some homeowners.

However, as with all re-mortgages, you still need to consider all your options and whether a particular product suits your needs and circumstances. It should be said that although this type of product offers a welcome solution to those that feel there is room for rates to improve over the next couple of years (but don’t want to be caught out if the outlook shifts again), you will be looking at a higher rate than if you selected a fixed or variable rate alone.

Although rates have been coming down over recent months and the economic outlook over the next two years is broadly positive, there is still room for fluctuation in rates in response to various external factors. If your current mortgage product is coming to an end and you would like to review your options, speaking to a mortgage adviser is invaluable to help you navigate the mortgage market.

This article isn’t personal advice. If you’re not sure whether a course of action is right for you, ask for financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.