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The biggest advantage of a fixed rate is that irrespective of fluctuations in interest rates, your monthly repayments remain same throughout period of fixed rate - usually six months to five years.
A fixed rate mortgage is suitable if your mortgage repayments take up a large proportion of your income as it protects you from rises in interest rates. However, you would not benefit from any reduction in lenders standard variable rate.
Fixed rate mortgages generally incur a penalty if redeemed within fixed rate period.
The advantage of a fixed rate mortgage is that you know exactly how much your mortgage will cost, and for how long. If interest rates on your mortgage rise, well fixed rate will not. Conversely, however, when mortgage rates drop, your fixed rate mortgage will not drop with them.
The key benefit of a fixed rate mortgage is that you are able to accurately budget your repayments for a set period of time. In addition, fixed rate mortgages are an excellent option, if it becomes apparent that interest rates may be rising over coming years, as you can protect your mortgage repayments against rises by choosing a fixed rate mortgage.
You may freely reprint this article provided author's biography remains intact:
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.