Fixed Rate
Mortgages
A fixed rate mortgage has a set interest rate for an agreed period of time. This means that no matter what interest
rates do during the set period, your mortgage payments will always be the same. This can be comforting if you have a
tight budget because you will never have to pay any extra should the interest rate increase.
However, should interest rates fall, your mortgage payments will stay the same until the end of the agreed period, so you should carefully consider how long you want to be locked into the same fixed rate.
Lenders have fixed rate deals ranging from one to ten years, and sometimes even longer. At the end of the fixed term, the interest rate will usually revert to the lender�s standard variable rate.
Fixed rate mortgages will usually have an early repayment charge should you wish to switch to a different loan or pay off your mortgage during the fixed period. This means that you may have to pay a fairly hefty charge should your circumstances change before the end of the agreed time. However, some lenders will allow you to transfer the deal and the rate to a new property if you move.