Fixed Rate Mortgages
With a fixed rate mortgage, you pay a fixed sum each month to
the lender for a specified period of time. After this period,
your payments will start to vary, as your mortgage will be tied
in with the lenders standard variable rate. This means that it
makes it much easier to budget each month during the fixed period,
as you will know exactly what you have to pay each month no matter
what happens to the interest rate. However, should the interest
rate drop during this period, you will still have to pay the same
amount.
Most fixed rate periods run from six months to 5 years, however
some are available that run for the duration of the mortgage.
It can be a good idea to follow the behavior of the interest
rate over the last few years, this should help you predict if
it will go up or down, however, if you are fairly confident it
will go down, then you will probably get the best value from a
base tracker mortgage.
