Refinance vs Hold vs Sell: Product Expiry Decision

At product expiry you only have three real options: switch to a new deal, ride the lender's SVR for a bit, or sell and bank the equity. SVR is almost always the most expensive of the three, so you only sit on it briefly and by choice.

The decision in one line

If you plan to keep the property, you nearly always refinance rather than sit on SVR.

If you are ready to exit or overweight in that area, you run the numbers on selling instead of rolling into another fix and locking in more years of risk.

Snapshot: refinance vs SVR vs sell (2026 environment)

Equity release: the simple LTV calculation

You want a clear formula landlords can reuse:

Step 1: estimate current value. Step 2: multiply by target LTV (often 75%). Step 3: subtract current mortgage balance.

Example:

• Property now worth GBP 300,000.
• You want max 75% LTV BTL remortgage.
• 75% of 300,000 = GBP 225,000.
• Current mortgage GBP 180,000.
• Available equity release = GBP 45,000 (before fees).

That is the number you compare against:

• Remortgage costs (fees, higher rate if any).
• What you will actually do with that GBP 45k (another deposit, refurb, debt repayment).

If you are paying GBP 300-400/month extra by sitting on SVR instead of refinancing, you are burning GBP 3,600-4,800/year that could have serviced that new borrowing.

Costs of refinancing vs cost of doing nothing

Refinance costs

You should list them as a mini table on the page:

• Product / arrangement fee: often GBP 999-1,999 flat or 0.5-1% of loan.
• Valuation fee: sometimes free, sometimes a few hundred.
• Legal / conveyancing: some lenders cover it on remortgages, others do not.
• Broker fee: typical GBP 300-1,000 if applicable.
• ERC (if leaving before your current deal ends): often 1-5% of outstanding balance for 2-5-year fixes.

You compare this one-off cost to the interest saving vs SVR over the new deal term.

The SVR trap

2026 averages:

• Typical SVRs 6.0-7.5%; HomeOwners Alliance quotes 7.13% average in April 2026.
• Best 5-year fixes around 5.54% average in one example; competitive deals lower with good LTV.

On GBP 200,000 over 30 years:

• Payment at 5.54% = GBP 1,141/month.
• Payment at 7.13% = GBP 1,348/month.
• Difference = GBP 207/month or GBP 2,484/year.

On BTL terms with interest-only, the gap in interest cost is similar: 2%+ extra on SVR vs a competitive deal can easily be GBP 3,000-4,000/year on a typical landlord loan.

So you tell them plainly:

"Every month you sit on SVR you are usually throwing away a few hundred pounds that could be either profit or debt reduction."

SVR only makes sense short-term when:

• You are already marketing the property for sale.
• You expect to remortgage within months, not years, and need the absence of ERC.

Selling: CGT vs opportunity cost of holding

You need to articulate why selling is not automatically "losing" the property, but freeing capital.

When you sell:

• You repay the mortgage.
• You pay selling costs.
• You pay CGT on the gain.

CGT:

• From April 2024, residential property gains are charged at 18% for the part in basic-rate band and 24% above that.
• Most landlords with decent income pay 24% on most of the gain.
• You must report and pay within 60 days of completion.

Example:

• Original cost GBP 180,000, sale price GBP 260,000, gain GBP 80,000 (simplified).
• CGT at 24% on most of this = GBP 19,200.
• Agent + legal fees say GBP 5,000.
• Mortgage balance GBP 150,000.

Net cash: 260,000 - 150,000 - 5,000 - 19,200 = GBP 85,800.

You then compare:

• Keeping the asset and maybe refinancing, making say GBP 2-3k/year net after tax.
• Versus GBP 85k cash now, which you could use to:
• Pay down more expensive debt.
• Put into higher-yielding or less regulated property.
• Reduce risk as you approach retirement.

The decision page should ask bluntly:

Are you keeping a mediocre asset and paying remortgage fees just to avoid a one-off CGT bill, when that CGT bill buys you a lot of freedom?

Decision criteria to hammer

1. Current rate vs available rate

If your product is ending and your lender's SVR is 2+ percentage points higher than new fix/track options, you nearly always refinance if you are keeping the property.

If your current fix is already very competitive and you would pay a chunky ERC to move, you may hold to the end of the term, then switch.

2. Equity position

Low equity (high LTV): Refinancing may be constrained; rate options poorer. Equity release might be limited or unwise.

Good equity (say <60-70% LTV): You have options: refinance at better rates, release capital, or sell at a strong price.

Use the 75% LTV equity formula in the article so the reader can quickly estimate "what can I pull out" in their head.

3. Portfolio performance

If this property has low yield, high hassle, or poor prospects, product expiry is a natural point to sell or deleverage rather than blindly remortgage.

If it is a star performer, remortgage and possibly release equity to replicate it.

4. Retirement and age

If you are approaching retirement and want less debt, you might:

• Remortgage to a shorter term or lower LTV.
• Or sell and clear several mortgages with the proceeds.

If you are mid-career building, you may:

• Remortgage and recycle equity into more deals, accepting more leverage but with a clear plan.

5. Property condition and upcoming capex

If the house needs major works (EPC upgrades, roof, big refurb), ask:

• Do you refinance to fund the works and hold?
• Or sell as-is and let the next owner deal with them?

The opportunity cost angle: Spending GBP 20k in capex and GBP 3k/year in extra interest on SVR to keep a weak property is often worse than selling, paying CGT, and buying better stock or paying down other loans.

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