Glossary - Fixed Rate Mortgage

Fixed Rate Mortgage is a mortgage with a fixed interest rate.
The mortgage rate is set for a period of time, usually between 3 to 5 years. The advantage of this loan is that you know the exact amount that you will have to pay monthly while the fixed term is running. This means that you can budget effectively each month. The disadvantage is that if the UK Base Rate falls below your fixed rate, you will not benefit because you will still have to pay the fixed rate that has been agreed.

Example: UK Fixed Rate Mortgage
There are many reasons why people take on fixed rate mortgages. One reason could be for budgeting, if the consumer has financial constraints on them, it will help to know precisely what their mortgage premium is so they can budget accurately. A fixed Rate Mortgage has an interest rate that is set for a period of time, once this period has come to an end the consumer can continue to save by Enquireing for another mortgage product.

Useful Tip
Buying property is one of biggest investments that a person will do in their lives, so make sure that all advice is taken before signing any contracts. Understand all terms and conditions before agreeing to anything. Once exchange of contracts has been completed both parties are legally bound to the sale and purchase of the property.

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