5 Year Fixed Rate Mortgage

If you are buying a property for the first time and are concerned about the fact that interest rates may soon be on the increase, a 5 year fixed rate mortgage may be a suitable product for you. The fact that the Bank of England base rate is now at an unprecedented low rate means that you should find a good deal at the moment on a 5 year fixed rate mortgage. The risk with choosing a fixed rate mortgage, especially a 5 year fixed rate mortgage, is that another mortgage product could offer a lower interest rate over this period. However, even if this does happen from time to time over the length of the 5 year fixed rate mortgage term, you do have the benefit of knowing exactly how much is going to leave your account each month. This means that you can budget much more effectively. More info

The interest rate that you receive on a 5 year fixed rate mortgage deal will depend on the amount that you borrow. Lenders calculate 5 year fixed rate mortgage interest rates according to the ‘loan to value’ (LTV) that you are borrowing, or rather the amount you intend to borrow compared to the overall cost of the property. The lower the amount you plan to borrow, the lower your interest rates will be, and the better the 5 year fixed rate mortgage deal will be overall for your finances. The best way of comparing two 5 year fixed rate mortgage deals is to use the APR or annual percentage rate of change. The APR takes the additional costs of a fixed rate mortgage into consideration, such as early repayment charges and the mortgage arrangement fee. Less