Fixed Rate Mortgages
Fixed rate mortgages have a fixed interest rate for a set term - typically 2 or 3 years but 5 and even 10 year fixed rate mortgages are also available.
What are the benefits of fixed rate mortgages?
Fixed rate mortgages are popular with first time buyers, in particular, as they offer the security of knowing exactly how much of your mortgage you will be paying off each month.
Arrange your mortgage online through NationwideIf the mortgage lender's standard variable rate increases, the fixed rate mortgage borrower will be paying less each month than a borrower on the standard variable rate.
Are there any drawbacks to fixed rate mortgages?
If the standard variable rate drops below that of the fixed rate mortgage deal then you will be paying more than you would do on the variable rate mortgage.
Also, fixed rate mortgages are only valid for a certain period of time, after which the interest rate reverts to the standard variable rate, which may be much higher. It is also wise to check if there are any early repayment charges associated with the period after the fixed rate.
Where to find fixed rate mortgages
Most high street banks and building societies have fixed rates mortgages and with competition fierce for the lowest fixed rate mortgage between mortgage lenders, some good fixed rate mortgage deals can be had if you shop around. Also check a mortgage broker such as Alexander Hall or Charcol for fixed rate mortgages.