Fixed Rate Mortgages

The interest rate is fixed by the lender for a set period. It will normally revert to SVR after the initial period. The advantage of a fixed rate is that your monthly repayments stay the same even when interest rates rise. You can budget knowing what your monthly repayments will be. The potential disadvantage is that your monthly repayments stay the same even when interest rates lower. Also, the lender may charge a one-off arrangement fee. There are usually early redemption penalties should you wish to redeem the mortgage during a period set by the lender.