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Your lender agrees a set rate of interest
for a specified period of time. Irrespective of movements
in the interest rate your monthly payments will not
change. Generally anything between 1 and 25 year fixed
rates are available.
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Commonly a lender will require a non-refundable
up front booking fee to be paid on application to reserve
the mortgage.
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Further fees such as arrangement fees
are also frequently experienced with this type of rate.
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The fixed rate provides the security
of knowing the exact monthly cost of your loan for
a set period.
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The rate will also provide a buffer
against increases in the interest rates.
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Unexpected increases in payments at
term end. Possibility of losing out should interest
rates fall below your agreed rate.
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Possibly tied in to variable rate with
same lender for various periods following the fixed
rate term end.
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early repayment charges can prevent
restructuring of your mortgage and associated finances
.A fixed rate mortgage is the most suitable option
in a number of circumstances the most common being
those identified below.
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Larger borrowings. Individuals on tight
budgets expecting wage increases over the first few
years of the mortgage.
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First time buyers looking for security
during the first few years of setting up home.
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Borrowers who anticipate rising interest
rates.
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Check out our top ten fixed rates
here.
