What is a fixed rate mortgage?
As the term implies, with a fixed rate mortgage the mortgage rate is fixed for a set period of time, so no matter what movements occur in the lenders standard variable mortgage rate, the borrowers arrangement is fixed and, therefore, so are the monthly fixed rate mortgage payments. A fixed rate mortgage would suit someone who likes to know where they stand. A fixed rate mortgage, as suggested by the name, is a mortgage where equal repayments are made every month. Fixed rate mortgages allow you to easily manage and plan your monthly expenditure – because the payment will be the same every month and you wont be affected by any rises in the base rate. If the interest rates rise above the fixed rate on your mortgage, you will see the real benefits of the fixed rate mortgage. A fixed rate mortgage makes it easy to plan ahead, because as the name suggests, the interest rate on your mortgage stays fixed. This means that as a fixed rate mortgage customer, even if the Bank of England Base Rate
A fixed-rate fully amortizing mortgage is a loan with an interest rate and monthly payment that remains fixed for the life of the loan. A fixed-rate mortgage is designed so that the borrower has repaid the loan at the end of the term. Fixed-rate mortgages are available for 30 years, 20 years, 15 years and even 10 years.
