This is a mortgage rate for people who require the security of knowing exactly what their monthly payments will be for a certain period of time (usually 2 to 5 years).
One would usually expect to pay slightly more each month than you would for a Tracker mortgage, because you have the ‘comfort’ of fixed monthly payments, regardless of what happens with general interest rate fluctuations.
E.g. A lender may offer you a 2 year fixed rate (or you may prefer a fixed rate for longer term security, such as 5 or 10 years) where your monthly mortgage payment would remain the same for the first 2 years. See the diagram below.
Please note the graph below is for illustrative purposes only.
With Fixed Rate mortgages it is the Lender which takes the risk regarding interest rate rises, rather than you! Therefore the Fixed Rate they offer will be priced to reflect the expectations for interest rate movements as well as reflecting other market factors.
If you have a Fixed Rate and interest rates rise, then your payments will remain the same.
If interest rates fall, your mortgage payments will still remain the same.
At the end of the Fixed rate we will be happy to review the mortgage for you to help you obtain the most competitive deal!
Top Tip: The difference between Tracker and Fixed Rates varies all the time, so it is very important to weigh up market conditions and expectations BEFORE committing yourself.
For friendly, plain speaking advice, please contact one of our expert mortgage advisers today on 01271 346123.