|
Fixed Rate Mortgage
Mortgage lenders have devised many different mortgage products, so borrowers have a wide selection to choose from according their individual requirements. Most banks and building societies offer mortgages, as well as specialist mortgage lending companies.
With a fixed rate mortgage you pay an agreed rate of interest for an initial period, so you know exactly what you'll be paying each month during that time. If interest rates go up or down during the fixed rate period, your payments will always stay the same, so you can budget more easily knowing that your repayments will not change.
When the fixed period ends, you will usually move to the lender's standard variable rate.
Points to watch:
* You may have a choice of fixed rate periods, typically 2 or 5 year options.
* You may have to pay the lender an arrangement fee for setting up the fixed rate mortgage.
* A higher rate of interest, compared with the lender's current variable rate, may apply during the fixed rate period.
* An early repayment charge may apply if you repay all or part of the mortgage loan during the fixed rate period.
* Find out what payment scheme will apply at the end of the fixed rate period and how easy it is to change to other schemes offered by the same lender.
* There may be a penalty for moving to another lender after the end of the fixed rate period.
* Make a note in your diary to review your mortgage with the mortgage lender or your mortgage broker before the end of the fixed rate period, so that you can decide your best option at that time.
For further information click here for independent mortgage advice and quotation.
NOTICE: A mortgage is a loan that is secured on your home and you also need to think carefully before securing any other debts against your home. Your home could be taken away by the lender and sold if you do not keep up the repayments on the mortgage or any other debt secured on it - if you are in any doubt, seek independent professional advice. These notes are offered as a general guide only and do not constitute mortgage or legal advice.
|
