Fixed Rate Mortgages – Know Your Rate!
Nothing is ever certain in the world of finances, and there’s no way of predicting how the market will change in the future. However, if you want to be able to plan your budget precisely, then a fixed rate mortgage might be the right option. The repayments will be fixed for a set period of time – usually between the first one and five years of your mortgage, so you can be sure that any rises in the interest rate will not affect you. The term the rate remains fixed can be as long as ten years.
Fixed rate – the pros
For those on a tight budget, it can be useful to know exactly what will need to be set aside each month for mortgage repayments. Also, it can be a good move to fix your rate when the economy looks like it’s about to change and interest rates rise. If, from studying the market, you anticipate that rates are set to rise in the near future, then taking a fixed rate now could mean you will save money over the next few years. Even if the Base Rate set by the Bank of England rises, you will be protected, at least for the term that your payments are fixed.
Fixed rate – the cons
If the market changes and interest rates fall, you could lose out on a reduction in rates. Fixed rate mortgages are often set at slightly …