The great advantage of this is the security it provides. You
know that, no matter what happens to other people's interest
rates during that time, yours won't alter.
So when you take out the mortgage, you can choose a loan size
and a repayment amount you're comfortable with and not
have to worry that it will go up.
The possible costs
When interest rates are stable, market leading fixed-rate
mortgages can offer competitive interest rates, but they do
have potential downsides
Falling interest rates
Even if interest rates generally fall, yours won't, so you
might end up paying more than you need to for months or even
years.
And don't assume you can simply walk away from the deal if
it no longer suits you
Painful fees
The fees for fixed-rate mortgages can be quite high compared
to those on other types of deals.
When interest rates are rising and lots of people want to
fix their payments, these deals often cost more to set up
than discounted
or tracker
variable rate deals.
Also, if you want to pay off your mortgage during the fixed
period, you're likely to face a hefty early
redemption penalty and when we say hefty, we mean several
thousand pounds.
To prevent nasty surprises, it's essential to
check what fees might apply if you need to remortgage or sell
during the fixed period before you sign up to a deal.
And never go for a loan that has penalties which extend beyond
the fixed-rate period these are simply not worth having,
as you will be stuck on your lender's uncompetitive standard
variable rate.
Read
enough? Just want a quote? To get
your best mortgage quote quickly and easily we can
put you in contact with a recommended mortgage adviser. It's free,
completely confidential and there's no obligation at all. Simply
fill out the form below
