Information about all types of mortgages

What is a Fixed Rate Mortgage?

Fixed rates

Unlike discounted or tracker mortgages, a fixed rate mortgage means that you will pay the same amount of interest for an agreed time (usually 1-5 years). Often the rates are slightly higher than a variable loan, but they offer the security of knowing that if interest rates go up, your repayments will remain the same.

Pros and cons of a fixed rate mortgage...

  • One of the most popular types of mortgage with first time buyers, as it offers stability and allows you to control your budget more effectively.
  • This also makes it the favourite choice of young families and single homeowners who don’t want to take the risk of a large rise in interest rates - which would mean an increase in monthly repayment amounts.
  • If you expect there to be changes in your financial circumstances in the near future, a fixed rate is usually the best option.
  • However - if interest rates fall, you won’t see the benefit.
  • When your fixed term ends, your payments may rise as you switch to the normal variable rate.