What happens when your mortgage term ends

Two different things get called "my mortgage ending", and they have very different consequences. This guide is about the second one.

The end of your fixed or tracker deal — the rate period, commonly two or five years. The loan continues; only the interest rate changes.
The end of your mortgage term — the full length of the loan, commonly 25 to 35 years. This is the date the balance must be repaid in full.

If your rate deal is what is ending, the guide on fixed-rate deals ending is the one you want; it is linked at the foot of this page.

On a repayment mortgage

If you have been on a repayment mortgage for the whole term and never missed anything, the end of the term is genuinely the end. The final payment clears the balance, the direct debit stops, and the lender releases its charge over the property. You will usually receive confirmation that the mortgage is redeemed.

Two practical points. Your lender no longer requires you to hold buildings insurance, but the risk has not gone anywhere — that is a condition you are now setting for yourself rather than one being set for you. And with the charge removed, HM Land Registry’s record of the property changes; it is worth confirming that has actually happened rather than assuming.

On an interest-only mortgage

This is the case that catches people out. On interest-only you have been paying the interest and none of the capital, so at the end of the term the entire amount you originally borrowed falls due as a single lump sum.

That is expected — it is how the product works, and there was supposed to be a repayment vehicle set up alongside it, such as an investment or an endowment. The problem arises when that vehicle has underperformed, was stopped years ago, or never really existed.

If you cannot repay at the end of the term

Do not wait for the date to arrive. Lenders have considerably more room to help before a term expires than after it, and the FCA expects them to work with borrowers rather than move straight to possession. Contact them as early as you can — years out is not too early.

The options generally discussed include:

Extending the term, so the balance is repaid over more years at a lower monthly cost. Age and affordability at the new end date both matter here.
Switching some or all of the balance from interest-only to repayment, which raises the monthly payment but starts clearing the capital.
Remortgaging to a new lender or product, subject to affordability and, on some products, your age at the end of the new term.
A retirement interest-only mortgage or equity release, for older borrowers. These are specialist products with significant long-term consequences and require regulated advice.
Selling the property and repaying from the proceeds. Nobody wants this to be the answer, but chosen early and on your own timetable it is a very different thing from a forced sale.

Free, impartial help is available and is worth using before committing to anything. MoneyHelper is government-backed and does not sell products.

Interest-only mortgages and repayment options — MoneyHelper
Mortgages: information for consumers — FCA

If the term ends and the balance is unpaid

The loan does not quietly roll on. The full amount becomes immediately due, and the lender is entitled to pursue repayment, ultimately through possession proceedings. Interest generally continues to accrue in the meantime.

This is why the date is worth knowing years ahead rather than months. Almost every option above needs lead time to arrange, and the ones still available narrow sharply as the date approaches.

Find your actual date

Your term end date is on your annual mortgage statement and in your original offer. It is not the same as your deal end date, and the two are easy to confuse because both get described as your mortgage ending.

If you are on interest-only, the statement will usually also show the balance outstanding — which, unlike on a repayment mortgage, will look much the same as it did last year. That is the number that falls due.