Fixed Rate Mortgage Deals
While it is true that there are a variety of different providers that may claim to specialise in providing fixed rate mortgage deals, it is important to research these different offers for comparisons on mortgage deals that are the most competitive. Fixed rate mortgages are one of the most popular types of loan available, due in part to the high level of financial security they provide. Fixed rate mortgage deals offer a number of advantages to a potential property buyer, providing a useful alternative to variable rates. Typically, fixed rate mortgage deals offer the following features:
- Fixed interest rates for a set period of time, from 2 years to 5 or 10 years, or for the life of the mortgage
- Payments will not change for the mortgage term
- Easier budgeting with fixed monthly payments
- Protection from increased interest rates
Fixed rate mortgages work on the basis that the agreed interest rate between the lender and the borrower will not change for a set period of time. Depending on the policy selected, this period may range from anything up to 10 years, or even the entire length of the mortgage. Although generally speaking, the longer the agreement the higher the average cost of repayments will be.
Because these interest rates will remain the same, and cannot be affected by either the current financial climate or the provider, lenders tend to set interest rates slightly higher than other types of policy in order to compensate. However they are still regarded as a highly popular and safe option for many people, as they make payments very easy to budget for. Although the rates on different policies may vary, it is also important for customers to decide exactly what type of fixed rate mortgage deals will be best suited to them.
The following is a brief explanation of both types:
Repayment mortgages are fairly straightforward, customers will be expected to regularly repay their loan with interest rates included on top until the mortgage has been paid in full.
Interest only mortgages are slightly different, initially customers will only be expected to repay the interest on their loan. At the end of the loan period, customers must repay the borrowed amount in full, or will risk losing their property.
If you are searching for a suitable fixed rate mortgage deal, you may wish to see our mortgage comparisons table for information on the various offers available.
Require mortgage advice? You can call our mortgage team on: 0117 332 6063
Monday to Friday 8.30am to 7pm