Fixed rate

As the name suggests, the rate you will be charged is fixed for a period of time. Generally fixed for 2, 3 or maybe 5 years, occasionally lenders will offer a 10 year or even longer term. This means your monthly payment will remain the same for this period of time.

Once  the the fixed rate period finishes options available will normally include:

  • Staying with your existing lender at the standard variable rate.
  • Staying with your existing lender and moving to another product. This will  normally involve paying a fee to your lender.
  • Searching the market to find another mortgage from another lender.

A fixed rate is a popular option for first time buyers as it guarantees the monthly payment that will be paid.

Benefits of a fixed rate:

  • No nasty shocks during the fixed rate period.
  • Monthly payments guaranteed to stay the same during fixed rate period.
  • Peace of mind that payments remain the same during fixed rate period.

Negatives of a fixed rate:

  • If interest rates drop, monthly payments will remain the same.
  • Locked into the rate until the end of the fixed rate period.
  • Penalty fee required if the mortgage is redeemed during the fixed rate period.
  • Lender will charge you a product and sometimes a booking fee for a fixed rate.

Always consider what your circumstances are and have some idea of your view on the future of interest rates before you decide if a fixed rate suits you.

Your home may be repossessed if you do not keep up repayments on your mortgage

For more information or if you wish to discuss please contact on any of the following:

Telephone number: 01708 640855


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