Fixed Rate Mortgage
2 year fixed rate mortgages Fixed Rate Mortgages Explained
With a fixed rate mortgage the monthly repayment amount is
fixed for a specified period irrespective of changes to the Bank of England's base rate or
the lenders standard variable rate.
Fixed rate mortgage schemes generally last two to five years, although longer terms are available.
At the end of the fixed rate the interest rate reverts to the lenders standard
variable rate. A fee called an early redemption penalty would apply if you
chose to cancel your fixed rate mortgage within the fixed rate period.
Cheapest Fixed Rate Mortgages
Some of the cheaper fixed rate mortgages may charge a redemption fee beyond the fixed rate period. This is called a 'tie in period'. When you compare fixed rate mortgages this factor needs to be considered, for details on the cheapest fixed rate mortgages simply click on the link above.
Flexible Fixed Rate Mortgages
There are now some mortgage lenders that offer fixed rates with the flexibility to make unlimited overpayments without being charged an early repayment fee. These flexible fixed rates would only incur an early repayment charge if the mortgage was redeemed in full. For further details on flexible fixed rate mortgages please complete our free mortgage advice form.
Advantages and Disadvantages of Fixed rate mortgages
Advantages
- Peace of mind that your mortgage payment will be safe guarded against increases in the lenders standard variable rate during the fixed rate period.
- Budgeting is made easier as you will know exactly what you will be paying during the fixed rate period.
- Lower interest rate in the first few years then the lenders standard variable.
Disadvantages
- Early redemption penalties can be onerous and expensive.
- Extended tie in period could mean you paying a higher rate once the fixed rate has ended.
- The lenders standard variable rate may fall below the fixed rate.
- You will normally have to pay an application fee when arranging your fixed rate mortgage.
Compare Fixed Rate Mortgages
There are many different fixed rate periods from 18 month fixed rates right up to 20 and 25 year fixed rates. By using Go Directs mortgage quote tool you can specify the fixed rate period and compare it with other terms to find a period that's right for you.
Do you want fee free fixed rate mortgage advice?
If you would like to speak to a mortgage advisor regarding fixed rate mortgage or remortgage schemes please complete our fixed rate mortgage advice form and a professional mortgage advisor will contact you to discuss you mortgage needs.
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We normally do not charge a fee for mortgage advice, however a fee paying option is available. Our typical fee would be £500
REPAYMENTS ON YOUR MORTGAGE
Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
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We normally do not charge a fee for mortgage advice, however a fee paying option is available. Our typical fee would be £500