Fixed Interest Rate Mortgages
A fixed interest rate mortgage is where the interest rate will remain the same for a set period of time. So, with this mortgage type, you will not be affected by interest rates going up or down for a set number of years. Unlike a variable rate mortgage, you will have peace of mind here as you will know the exact amount you will have to repay monthly during this period. Currently, on the market, there are more fixed-rate mortgages available than any other type of mortgage deal, as they are popular with both lenders and homeowners.
Fixed-rate home loans can last between one to 15 years, although 15-year deals are often uncommon. You can currently fix the rate of your mortgage for one, two, three, five, seven, ten or fifteen years. One-year fixed rate deals tend to only be available to those with specific requirements such as those looking to borrow a large amount and borrowers which are purchasing a home with a help to buy equity loan.
When it comes to fixed-rate home loans, the longer your deal is set to last, the higher the interest rate will be on the mortgage. This is in place as it is difficult for the lender to predict what will happen in the market over longer time periods. So, in this situation, you are basically paying for the security of knowing that the interest rate will not increase no matter what is happening in the current market.
Once a fixed rate period has come to an end, you will be transferred onto a standard variable rate mortgage by your lender. Each lender sets their own standard variable rate, and this can change by any amount at any given time. It is advisable to consider remortgaging to a new deal here, with your lender or a different provider before you are transferred onto the SVR. This can be arranged up to 6 months before your fixed period is set to end.
For further advice on fixed interest rate mortgages, get in touch with us here at Stuart Brown Mortgage Services today.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up the repayments on your mortgage.
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