Fixed Rate Mortgages

The monthly interest rate will stay the same for a set period of time, for example, between 2-5 years. At the end of the fixed rate period your rate will usually change to the Variable rate.

Advantages of Fixed Rate Mortgages

You are guaranteed that your rate will be exactly the same every month for the duration of the fixed rate term – even if other interest rates rise during this period. You can confidently plan your budget for the whole period, because you’ll know in advance exactly what your major outgoings will be

Disadvantages of Fixed Rate Mortgages

If other interest rates fall during the set period, then the amount you pay during the fixed rate term may be higher than if you had chosen a mortgage type where the interest rate is allowed to rise and fall. Your payments go up and down as the mortgage rate changes. Mortgage rate movements usually respond to changes in the base rate set by the Bank of England’s Monetary Policy Committee. This would not apply to LIBOR rate products.

If you want to find out more about fixed rate mortgages, please feel free to contact us or arrange a FREE mortgage consultation.