Fixed Rate Mortgages

For new homeowners, fixed rate mortgages are the best way of ensuring that your monthly repayments stay within budget. Especially in the current turbulent climate, fixed rate mortgages guarantee a set repayment each month for the term of the home loan. The way in which fixed rate mortgages operate in this respect is to increase the actual repayments over the mortgage term to correspond with the decreasing interest rate (because the overall mortgage balance gets smaller). This way, you will pay exactly the same each month.

Fixed rate mortgages come into their own during a downturn, because you would be able to find a very good deal (bearing in mind that lenders' rates link directly or indirectly to the Bank of England base rate) while the base rate is so low. Should interest rates rise significantly while the economy balances out, you would avoid the payment increases that those on tracker mortgages would face. Fixed rate mortgages also enable you to choose the length of mortgage term, and the longer you commit to fixing your rate for, the better your interest rate will be. Many people choose two or five year fixed rate mortgages, although it is now possible to fix your rate for up to twenty or thirty years.

Find a Fixed rate Mortgage today!

Fixed Rate Mortgage Advantages

• Fixed rate stability allows you to plan ahead. With stable monthly payments, you can  safely plan ahead with your finances because you'll at least know how much you'll have to pay for your mortgage each month. There  won't be any sudden increases in your payment amount, so you'll know how much you'll have left for other expenses after making your payment.

• Extra payments will be applied to the principal. In the beginning, all of your payments will go toward paying off the interest of your fixed rate mortgage. Later, your payments will be applied to the principal. However, if you make overpayments, that money will be applied to the principal, and you'll be able to pay your loan of sooner.
• Your interest rate will remain stable for up to 15 years. When you go for a longer-term mortgage deal such as a 15 year fixed rate mortgage, you can guarantee that, whatever happens in the housing market, your interest rate will remain stable over this period.  Speak with your lender to set the fixed rate term of your loan.