Fixed Rate Mortgage

A Fixed Rate mortgage does just exactly what it says.  It allows you to fix the interest rate of your mortgage for a specific period of time, keeping your monthly repayments the same, unaffected by any changes in the interest rates.

Pros of a Fixed Rate are;

• you know exactly what you’re paying each month
• your monthly payments remain the same and do not increase for the agreed term

Cons of a Fixed Rate are;

• if the interest rate falls, you could be stuck with an uncompetitive rate
• you are tied for an agreed period of time - leaving within this time could result in an early repayment charge
• you may have to pay an early repayment charge if you repay the mortgage during the period specified by the lender at the outset.

Safer than a Variable Rate
A Fixed Rate mortgage provides security in knowing exactly where you stand each month.  This is a safer alternative to the variable rate and could be a better option for first time buyers or people who need the certainty of knowing what they have to pay each month. 

Don’t risk paying more….or less!
If the interest rate drops, it’s true that you could end up paying more than you would on a Variable Rate, but this needs to be considered alongside the fact that if the interest rate rises, you would pay less. 

The most important thing is that you can you afford your monthly payments; a Fixed Rate can offer the security in knowing that you can.