fixed rate mortgages

Fixed Rate Mortgages

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 the time (see variable rate). Usually the rate is fixed between 2 and 5 years, although, sometimes longer periods are available.

advantages of fixed rate mortgages

* 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 of fixed rate mortgages

* Probably have to pay an upfront application fee and/or an arrangement fee once the loan is taken.

* Early repayment charge.

* If interest rate falls below your fixed rate you may be left paying a higher rate than the variable rate.

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

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