"The Easy Way to Get Your Best UK Mortgage"



Bookmark This


Google Feeds


Yahoo Feeds


AOL Feeds


Newsgator Feeds
About Us
Your Privacy
Contact Us
Tip Our Charity
This website is Approved by Cradon Investments Ltd Authorised and Regulated by
the Financial Services Authority FSA No: 300505


TrustGuard

Mortgage Guide
Click for Full Contents

Types Of Mortgage
Click for Full Contents

Pros and cons of fixed-rate mortgages

If you're considering taking out a fixed-rate mortgage, here are some more things to consider.

If the idea that your mortgage payment could change from month to month worries you, it's worth giving fixes some serious thought.

The mortgage lender guarantees not to change your interest rate, and therefore your monthly payment, for an agreed period usually between one and five years, but it can be as long as ten or even 25 years.

(For more on long-term fixes, read Should I fix my mortgage for 25 years? and The dangers of a 25-year fix.)


A sense of security

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.

This used to be called an overhanging lock-in, but nowadays you're more likely to hear it referred to as an extended redemption penalty or tie-in.

For more on fees, see What are all these fees for?
Still can't decide?

If you're still uncertain whether a fix is right for you

Read Should I go for a fix or a discount?



To read more on this subject please see the list below or your mortgage guide or your home buying guide

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

Value of Property £  
(eg 125000)
Borrow How Much? £
(eg 92500)
Your Mortgage Type
 

Read On About

Read On

Read On / Mortgage Guide

Read On

Back to A to Z Mortgages UK List

Read more about Types of Mortgages

See contents of Full Mortgages Guide

See contents of Home Buyers Guide

I've read enough for now and want to get a free Quick Mortgage Quote




The two major varieties:

Repayment mortgages

Interest only mortgages

Then mix in the various:

Interest repayment arrangements

Finally, to cover all the different types there's a

Complete A-Z of mortgages

Complete A-Z

Can't Find It Here?

Enter what you are looking for in the box below


The step by step guide on how to get a mortgage with special tips

[improve this article]

Browse over 200 Free Mortgage Tips

Your Complete Guide to UK Mortgages

Find Out How to Win the Race to Buy Your Home - Home Buyers Guide

How to Sell Your Home

Learn How to Save ££s by Remortgaging

Read the Insider Info on Home Insurance

Best Buy UK Mortgage Tables

UK Mortgage Calculators

UK Mortgage Quotes

First Time Buyers

Self Employed Mortgages

Bad Credit Mortgages

Overseas Mortgages

Common Questions / FAQs

Mortgage Definitions

Mortgage Lenders UK List

LATEST MORTAGE UK NEWS

Site Help

About Us

Your Privacy

Contact Us

HELP

Mortgage Guide Site Map

Tip Our Charity