What is a Fixed Rate Mortgage?
These types of mortgages also allow you to have stability in your monthly budget, as your payment will never change in the fixed rate period, regardless of what is happening to the interest rates. If the interest rates drop, you could be paying over the odds, but you are protected in the event that they increase.
Fixed rates are normally offered for 2, 3, 5 or 10 years. There are also the occasional longer term fixed rates that come onto the market. These type of deals are ideal if you are not looking to move from the property within the ‘fixed’ period.
If however your circumstances change and you do wish to move within the fixed rate period, most lenders will allow you to port your mortgage. This means they will allow you to take your current mortgage with you to your new home, and you can take a top-up mortgage from them for the difference you may need on the next purchase. (This is always subject to terms and conditions so always let your broker know if you have any intention to move within the fixed period, so they can advise you accordingly.)
If however your circumstances change and you have to sell within the fixed rate period, most lenders have an early repayment charge that you would have to pay to redeem your mortgage early.
Why use a Broker for Fixed Rate Mortgages?
There are a number of advantages and disadvantages when looking at Fixed Rate mortgages, such as the length of the fixed rate, the arrangement fees for the mortgage, interest rate movements going up or down and penalties if you wish to exit the fixed period early. All of these areas need to be considered and more.
At JF Financial Associates, we remain neutral and don’t favour any one lender over another. Our experienced adviser excels in finding the right solutions tailored to you. They will work with you to understand your needs, your individual circumstances and what would suit you best.
So if you are looking for stability in your budget for any length of time, give us a call on 0345 508 8588. You have nothing to lose and everything to gain.
JF Financial Associates will never sell you something you don’t want. We offer honest advice on what you need.