What is “payment shock”?

When your fixed rate ends, your lender moves you to its standard variable rate (SVR) or you switch onto a new deal. In recent years, the gap between older fixed rates and today’s deals has widened, so monthly payments can jump sharply unless you plan ahead.

Quick, real world examples

£200,000 over 25 years
- At 1.8%: ~£828/month
- At 5.5%: ~£1,228/month → +£400/month
- At 6.5%: ~£1,350/month → +£522/month

£350,000 over 25 years
- At 1.8%: ~£1,450/month
- At 5.5%: ~£2,149/month → +£699/month
- At 6.5%: ~£2,363/month → +£913/month

(Illustrative calculations; we’ll run your exact figures for free.)

Timeline: what to do and when

6 to 9 months before your fix ends:
- Get a rate check & soft-search
- Budget test
- Start documents

3 to 4 months before:
- Secure a new rate (and hold it)
- Compare options

0 to 1 month before:
- Finalise and complete
- Set an overpayment plan (even £25–£50/month trims interest and shortens your term over time).

Your main options (and when they make sense)

1) Product transfer (stay with your lender)
Pros: Fast, minimal underwriting, often no legal/valuation fees.
Best for: Tight timelines or when the rate gap to remortgaging is small.

2) Full remortgage (switch lender)
Pros: Access to wider product range, potentially lower rate and better overall cost after fees.
Best for: Strong credit/income and time to complete.

3) Adjust the term (with caution)
Pros: Lower monthly payment by stretching the term.
Watch-outs: You’ll pay more interest over the life of the loan.

4) Part and part / interest-only elements
Pros: Can tame the monthly outgoings for higher earners with strong equity.
Watch-outs: You must have a credible repayment strategy.

5) Tracker or discounted variable
Pros: No/low early-repayment charges; flexibility if you think rates may ease.
Watch-outs: Payments can rise; build a buffer.

Don’t forget the total cost, not just the rate

The cheapest headline rate isn’t always the lowest overall cost. We’ll compare:
- Rate + fees (product, valuation, legal)
- Cashback or incentives
- True monthly payment over the fix period
- Flexibility (ERCs, overpayment allowance, porting)

Landlords: buy-to-let payment shock

Stress tests & ICR: Lenders assess rent vs mortgage at test rates.
Company vs personal: Structure affects rate and tax.
Portfolio strategy: Consider rate-staggering across properties.

Early warning signs to act on now

Your fixed rate ends within 9 months
You’ve had a pay rise/bonus
You’ve had credit issues or changed jobs
You’re considering home improvements or debt consolidation.

How We can help

Free, no-obligation mortgage review (Scotland & UK-wide)
Whole-of-market access + local knowledge of Scottish lenders and solicitors
Rate-hold & re-price strategy to capture improvements before completion
Hands-on case management so you avoid SVR and complete on time

Call us now on 01358 300100 or book a callback to see your personalised options before your rate ends.

FAQs: payment shock & fixed-rate endings

How far in advance can I lock a new rate? Typically 3–6 months; some lenders allow longer.
Will I pay an Early Repayment Charge (ERC)? If you switch before your fixed end date, likely yes.
Should I wait for rates to fall? Waiting exposes you to SVR if timelines slip.
Can I reduce the shock without extending the term? Yes. Consider part-and-part, offset, or structured overpayments.
What documents do I need? Photo ID, proof of address, recent payslips and bank statements, P60 or SA302s, and your current mortgage statement.