Fixed rate mortgages
Fixed rate mortgages are popular in the UK. As the name suggests, they allow you to fix the rate of interest you will pay on your mortgage for an agreed period.
Most UK mortgage lenders offer a range of fixed rate mortgages. The most popular are two-year, three-year and five-year deals, but it is sometimes possible to get a fixed rate mortgage for anything from six months to 25 years.
As a rule, the longer you fix your rate for, the higher the interest rate you can expect to pay.
Fixed rates can be suitable for any type of mortgage borrower, but can appeal particularly to first-time buyers, who like the security of knowing exactly how much their monthly repayments will be.
To work out how much a fixed rate mortgage will cost per month, why not use our handy calculators.
Pros of fixed rate mortgages
- They protect you against rising interest rates
- Regardless of what happens in the economy and how the Bank Base Rate moves, the interest rate you are charged is guaranteed to remain the same for the duration of your initial deal period
- They give you peace of mind, as you know exactly how much will be coming out of your bank account every month with a fixed-rate mortgage
- This in turn can help you with your budgeting.
Cons of fixed rate mortgages
- If interest rates fall during your fixed rate period, you will not benefit and may feel you are paying over the odds for your mortgage
- Fixed-rate mortgages come with a fee
- Fees have gone up rapidly in recent years
- Don't be surprised to be charged between £500 and £1,500 to fix the rate of your mortgage.
To receive fee-free advice on whether a variable rate mortgage would be suitable for your needs, click here.
Click here to compare the best fixed rate mortgages