Quick Enquiry
A Fixed Rate Mortgage is one where for a period of time the interest rate is set and will not be affected by changes in interest rates. At the end of the period the interest rate will become the Variable Rate applicable at that time (see Variable Rate). Usually the rate is fixed between 2 and 5 years, although sometimes longer periods are available.
Advantages
- Provides guaranteed mortgage repayments for the duration of the Fixed period giving protection from rising interest rates.
- Variety of periods beginning as short as six months so likely to be one to meet most needs.
Disadvantages
- Probably have to pay an upfront application fee and/or an arrangement fee once the loan is taken.
- If interest rates fall below your Fixed Rate you may be left paying a higher rate than the Variable Rate.
- If you redeem your mortgage during the fixed period and often for a period afterwards, you may have to pay a penalty. This is usually several months’ interest repayments
