Fixed Rate Mortgage
A fixed rate mortgage is where the interest rate payable to the lender is fixed for a specific period of time. Lenders may offer from one year to 25 years. The most common period of fixed rate mortgage are between 2-5 years.
The advantages of fixing the interest rate are:
- Easy Budgeting
- If interest rates rise, the payments are fixed so payments are not affected within the period.
The disadvantages of fixing the interest rates are:
- If interest rates fall, the borrower will not benefit as payments are fixed within the period
- If the borrower wishes to pay the mortgage within the scheme period, an early repayment charge will apply.
Overall, a mortgage borrower may decide to fix payments, as a 1% fall in the variable rate is ‘good to have’ but a 1% increase in the variable rate may cause financial problems.
First time buyers prefer fixed rate mortgages as they prefer to know exactly the payments each month as oppose to a payment which fluctuates. Our mortgage broker will advise the right deals based on your circumstances.
If you require mortgage advice on a fixed rate, please speak to one of our advisers. Fixed rates are the most popular choice in recent years (from 2015). If you are a first-time buyer or seeking a remortgage, please send in your details and we'll discuss your mortgage options.
A mortgage is a loan secured against your home or property. Your home may be repossessed if you do not keep up repayments on your mortgage.