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Fixed Rate Mortgages

Buyers entering the housing market for the first time will often find themselves being really stretched to the limit with the commitment they are being asked to make. Today any household with a “normal” income would struggle to make the repayments being asked of them. For this reason there is a lot to be said for fixed rate mortgages, which give the buyer the peace of mind that comes with knowing that, whatever fluctuations may occur in the market, the amount owed at the end of each month will be set in stone, with no nasty surprises.

Fixed rate mortgages are particularly helpful to first time buyers, who with everything else being equal probably find the task of having to meet regular mortgage payments quite daunting. Ordinarily they apply for a limited time period, typically anything between two and five years whereupon the rate will revert to the lender’s SVR (Standard Variable Rate). They tend also to have a lower interest rate by comparison to the standard variable.

Sometimes it will be possible for borrowers to make overpayments without incurring penalties in order to reduce the amount still owing once the fixed term has expired.