At Expedite Finance we have the knowledge and experience to help you find the right mortgage product. For many people, the right product could be a fixed rate mortgage but as with all such loans, a fixed rate mortgage comes with both advantages & disadvantages, and careful consideration is needed to make sure you get the best possible deal. As mortgage advisers, we will work to find the best fixed rate mortgage product suited to you. Before you make any decisions regarding the different type of mortgage products available, let’s look at fixed rate mortgages in a little more detail and see why they may, or may not be the right product for you and discover how Expedite Finance can help you make the right decision.
What is a Fixed Rate Mortgage?
All mortgages are extended term loans, and therefore come complete with necessary interest repayments. In simple terms, there are two main types of mortgage – variable and fixed rate. The market changes all the time – indeed, recent years have been something of a rollercoaster for mortgage interest rates and the housing market, thanks in no small part to financial insecurity across the globe – and your mortgage interest rate will be influenced by the state of the financial markets at the time you take it on. The Bank of England sets a base interest rate on a regular basis, and it is this that is the main influence on mortgage rates.
With a fixed rate mortgage, you and your lender agree upon an interest rate that will determine your monthly repayments for a set time; this rate does not change with rises or falls in the interest rates set by the bank; it remains static for the period agreed. The period agreed will usually be between two to five years, although there are longer deals available.
Pros and Cons of a Fixed Rate Mortgage
The major advantage of a fixed rate mortgage is that of knowing exactly how much you need to repay each month for the agreed term. This has many benefits – you know what your income and outgoings are going to be and can plan accordingly, and budgeting is much easier without fluctuating interest rates. At Expedite Finance, we believe that fixed rate mortgages are a sensible choice for first time buyers who may not already be familiar with the expense of running a household.
The main disadvantage of a fixed rate mortgage is that, should the Bank of England base rate fall below your agreed interest rate, you will continue to pay at the higher rate for the agreed term. Also, you will be required to pay a fee for arranging a fixed rate and, thanks to the added advantages and the possibility of the lender losing out to fluctuating rates, the actual interest rate will likely be higher, in the first instance, than that of a variable rate mortgage.
This is why it is important to consider your available options carefully: tie yourself into a fixed rate mortgage for too long and you could find that you lose out in the long run, although many people are happy with paying a slightly higher rate whilst they rest in the knowledge that their payments aren’t likely to fluctuate before their agreed fixed period is up.
At Expedite Finance, we can advise you on all aspects of a fixed rate mortgage, and also help you to understand the process of remortgaging should you wish to change. Remember that, at the end of the fixed rate term, the interest rate returns to the lenders set rate: there could be better deals out there, and we can help you find them.
Expedite Finance work hard to carefully search the best available product ranges for our clients based on their personal circumstances. We will look at all the fixed rate mortgage products available and may even have access to products and rates that aren’t available to you directly. For help and advice on mortgages, you can trust our friendly and experienced team to help find the right solution for you. Call us today on 0800 2012 148.
For mortgages, we can be paid by commission from the lender and a client fee of £395 paid on completion of the mortgage.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE