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Fixed Rate Mortgages |
A fixed rate mortgage is unaffected by the Bank of England base rate, with the rate of interest being set when the mortgage is taken out, and remaining at that level for the life of the mortgage. This is a very stable type of mortgage, and you will always know how much the monthly repayments will be as they will not fluctuate at all, however if the base rate does fall you will not see any savings with a fixed rate mortgage.
It is best to take out a fixed rate mortgage when interest rates are low, and the lenders are offering low rates, but you must be aware that if rates fall a lot you will see no savings, but if the rates rise you will not see any rise in your mortgage costs.
Generally speaking a fixed rate mortgage will have higher rates than a variable mortgage at the time of it being offered, as for the future comparison there is no sure way of telling if a fixed rate mortgage will cost you or save you money. |
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