Fixed-rate mortgages

Fixed-rate mortgages

With a fixed-rate mortgage, the interest rates you pay will be guaranteed to stay the same over a set period of time.  This set period is typically anything between one and ten years.  

Fixed interest rates mean your monthly payments will remain static, so you won’t need to worry about them being affected by a rise in your lender’s standard variable rate or the Bank of England’s base rates.  This does mean however that you won’t benefit from any fall in interest rates, and you could end up paying more than the average rates.

Can I get out of my fixed-rate mortgage?

Most lenders will allow you to switch to a different type of mortgage during your fixed-rate period, however there will typically be an early repayment charge for doing so.

What happens when I reach the end of the fixed-rate period?

When you reach the end of your fixed term, your mortgage will usually be transferred onto a variable rate such as a tracker, or your lender’s standard variable rate (SVR).  Moving to an SVR doesn’t offer the same security as the fixed rate, as any fluctuations in interest rates will impact your monthly repayments.    

If you do not want your mortgage to be transferred to your lender’s SVR, it can be a good idea to look around for the best mortgage deals a few months before your fixed rate term comes to an end.  

When looking around for mortgage deals, you may want to seek advice from a mortgage adviser, who will be able to help advise you on suitable products that different lenders are offering. 

Find a mortgage adviser in your local area.