Compare Fixed Rate Interest Only Mortgages
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A fixed rate mortgage may be useful for borrowers who are looking for some long term financial security with regard to their mortgage payments. Broadly speaking, there are two different types of fixed rate mortgage deal for you to consider; fixed rate ‘interest only’ mortgages, and fixed rate ‘repayment’ mortgages.
A fixed rate, interest only mortgage has several differences compared to a repayment mortgage. Once the period has begun, the borrower will be expected to repay this interest on a periodic basis. As it is a fixed rate agreement, these interest rates should not change for the duration of the loan, making it a potentially quite reliable option.
While customers are paying off this interest rate, they will also be expected to invest money in a savings vehicle so that the loan can eventually be repaid in full once the mortgage period has ended. This is often paid using an endowment, ISA, or through using a portion of the customers pension pot at the end of the policy.
This type of mortgage is often useful for customers who may be less financially secure than others, as they will generally be required to pay less month by month than someone using a repayment mortgage.
Although fixed rate, interest only mortgage may appear to have a number of useful advantages, it should be remembered that they are not without a certain degree of risk. Without a suitable investment fund set up, customers who are unable to repay their mortgage in full at the end of the loan period run the risk of losing their property, so it therefore important to make the adequate provisions.
If you are searching for a suitable fixed rate, interest only mortgage, you may wish to see our mortgage comparisons table for more information on the various offers available. If you are searching for the best fixed rate mortgage available, you may wish to see our mortgage comparisons table for more information on the various mortgage deals that are available.
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