Fixed Rate Mortgage Advice

One of the most important decisions you will make inhigh, and the fixed interest rate is lower than that of
your financial life is which mortgage you should get. Forthe tracker or variable rate mortgages.
many people, the option of a fixed rate mortgageAre there any drawbacks?
seems appealing. But what exactly is a fixed rateThere are drawbacks to getting a fixed rate
mortgage, and why do so many people choose thismortgage. The biggest drawback is that the interest
option? If you are new to mortgages then this articlerate is usually higher than that of variable rate
will let you know a little more about fixed ratemortgages. The added security comes at a price, in
mortgages and their benefits.that you have to pay more in interest over the length
What does fixed rate mean?of the mortgage. Also, the 'fixed' rate is usually only
A fixed rate mortgage is fairly straightforward, andfixed for a certain number of years, usually 2 or 3,
does exactly as the name suggests. A fixed rateafter which the rate can be put up and then fixed for
mortgage has an interest rate that remains the sameanother period. This can mean that your mortgage will
throughout the mortgage term, meaning that yourbe cheap now, but in the future the rate could rise.
monthly repayments will remain the same, allowing forWho should get fixed rate?
inflation of course.Despite its drawbacks, there are many people that
Why a fixed rate mortgage?should definitely opt for fixed rate mortgages. If you
Many people choose fixed rate mortgages becauseare on a tight budget and have a fixed income each
of the security and peace of mind that they provide. Ifmonth, then you cannot afford for your payments to
you have a fixed rate mortgage, then you know yourrise. Having a fixed repayment each month means
monthly repayments will not change, meaning you canthat you know you can make the payment even if
budget effectively for both the short and long term. Ifnational interest rates rise. Also, if you can get a deal
you have a mortgage with a variable rate of interestwhereby the starting interest rate is lower than that of
then your payments can change depending on marketa variable rate mortgage or even the same, then opt
fluctuations. This can leave you paying less, but oftenfor the fixed rate mortgage.
leaves you paying more each month. The best timesHow to decide?
to get fixed rate mortgages are when competition is