As
term implies, with a fixed rate mortgage mortgage rate is fixed for a set period of time, so no matter what movements occur in lender's standard variable mortgage rate, borrower's arrangement is fixed and, therefore, so are monthly fixed rate mortgage payments. A fixed rate mortgage would suit someone who likes to know where they stand. A fixed rate mortgage, as suggested by name, is a mortgage where equal repayments are made every month.
Fixed rate mortgages allow you to easily manage and plan your monthly expenditure - because payment will be same every month and you won't be affected by any rises in base rate. If interest rates rise above fixed rate on your mortgage, you will see real benefits of fixed rate mortgage.
A fixed rate mortgage makes it easy to plan ahead, because as name suggests, interest rate on your mortgage stays fixed.
This means that as a fixed rate mortgage customer, even if Bank of England Base Rate changes, interest rate on your mortgage remains constant over a fixed period of time. This makes your budgeting easier, because you can plan ahead knowing exactly how much your monthly repayments will be.
The fixed rate period can be anything between six months and five years, but it's always best to refer to a financial services professional before deciding what period of fixed interest rate to choose.
