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.

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A capped rate mortgage is a variable rate mortgage which has a fixed upper rate limit. This means that borrower knows in advance highest monthly payment that he may have to make.

One advantage of capped rate mortgage is that when interest rates are likely to rise, they offer protection for borrowers against repayments going over a certain level. This can be seen as being almost as attractive as a fixed rate mortgage. Having a capped rate mortgage can make it easier to budget when you know what highest amount your mortgage payment could be.

Be aware that this type of mortgage usually charges redemption penalties to those who wish to swap mortgage provider.

Capped rate mortgages are generally a compromise between fixed rate and variable rate mortgages.

Whilst providing peace of mind capped rates are generally more expensive than fixed or discounted rate products.

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