What is a fixed rate mortgage?
A fixed-rate mortgage is where the interest rate is fixed for a set period of time and won’t be affected by Bank of England (BoE) base rate rises or fluctuations in the market. You will know exactly how much you will be paying each month, and this won’t change until the fixed period has ended. This makes it easier to budget.
Usually, once a fixed rate arrangement comes to an end, the lender's standard variable rate (SVR) applies if the borrower hasn’t got a new mortgage deal in place, ready for when their current one ends.
Why would you choose a fixed rate mortgage?
A fixed-rate mortgage is a great choice for someone looking for security and the ability to accurately budget at the beginning of their mortgage, such as first-time buyers. They’re also suitable for homeowners who want to lock in on a good mortgage rate, especially if they believe the base rate is due to rise at some point.
