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Fixed Rate Mortgage

With a fixed rate mortgage the amount you repay the lender each month can be at a fixed interest rate for a specified period of time, regardless of changes to interest rate in the market place. It is common for lenders to offer rates fixed for a period of 2 to 5 years, but shorter and longer periods can be found in the market. At the end of the fixed rate (or ‘benefit’) period the rate will normally convert to the lenders Standard Variable Rate (SVR).
It is normal for lenders to charge up-front fees in the form of booking and/or arrangement fees. In addition lenders frequently apply an Early Repayment Charge (ERC) for fixed rate mortgages. This acts as a ‘lock-in’ making an often heavy charge for borrowers paying off their mortgage early. Watch out, as the ERC can sometimes last longer than the fixed rate period e.g. a 3 year fixed rate with a 5 year ERC.

What Are Fixed Rate Mortgages?
they are the most common type of house-buying loan, where the payments and interest rates remain the same, no matter what happens. Interest rates may increase, and other bills may also get bigger, but your payments towards your mortgage are constant. This means that you can settle your budget far in advance, knowing that your mortgage rates will remain fixed. If you have any additional items, such as house insurance, this may go up and down as money rates change, but payments of the fixed term itself does not move. What Does A Fixed Rate Mortgage Involve?
The fixed rate mortgage will involve a set number of payments over a number of years. There are a few options available, such as a 15 year loan, up to 30 years being the most common. The fewer years involved, the higher the payments made but the less interest that is accumulated. There are also options where you can pay 'biweekly', in which you can pay half the monthly sum every two weeks; this amounts to 13 months' worth of payments, thereby shortening the life of the mortgage.

Reason for Why Pick A Fixed Rate Mortgage
Many people feel more comfortable with a fixed rate mortgage, as it is a fairly stable monthly payment, and this makes budgeting for the amount easier to do. There is also comfort in the knowledge that there won't be any surprises when the bill arrives, and neither will you be hit with any extra sums at the end of the year. Fixed rate mortgages also allow you to 'overpay', or clear off more of your loan sooner, to a certain percentage each year, and do not charge. This can make the customer feel more in control of his money.

Where Can Fixed Rate Mortgages Be Found?
Most banks and building societies will have one, if not several, fixed rate mortgages available. They will have a number of different versions of this mortgage because there are made 'additions', options and services that can be put into the mortgage to make it more suitable to the client. As well as all these options, the booming mortgage industry now means that there are independent advisors, private mortgage brokers, and independent loan services who will all be happy to provide you with their selection of fixed rate options. There are now plenty of Internet sites where advisors, brokers and even the mortgages themselves can be found.

The Risks of Fixed Mortgages
Just like any other kind of loan, the fixed rate mortgage has some problems. Firstly, it is not available to high-risk clients, and anyone who cannot provide proof of earnings will be unwelcome; however, there are other options for them. The other risk is the amount of time it will take to clear the mortgage. A 30 year mortgage will probably cover the whole of the client's working life, a constant monthly payment that can only be paid off early by accepting a heavy 'charge' for breaking the contract. However, if you are looking for a stable mortgage in a world of unstable mortgage rates, then a fixed-rate mortgage is worth looking in to.

Fixed rate mortgages have their interest rates set for a certain period of time, which can be from one to ten years, after which time the rate will revert to the variable rate.

Generally speaking, the shorter the term of the fixed rate mortgage, the lower the interest rate and vice versa.

fixed mortgages have become very popular over the years due mainly to the vast changes in interest rates we have seen.

A fixed rate mortgage can give peace of mind because the borrower knows exactly what their repayments will be over a period of time.

One disadvantage is that, should you decide to move your mortgage or re-mortgage during or shortly after the fixed rate period, you will normally be subject to early redemption penalties which can be equal or more than the benefit you have received.

Looking for a fixed Mortgages 2 - 25 years!

With fixed  mortgages this means you know where you stand with your monthly repayments during the fixed rate period, whatever happens to interest rates in general. This enables you to budget with confidence. Nationwide can offer a range of fixes ranging from 2 year to 25 years.

Need help finding best fixed mortgage? Let our financial team find the best fixed rate mortgage deals for you from our panel of lenders

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Fixed Rate Mortgages Uk Home Buyers

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