19 Mar

Q&A: What is a fixed rate mortgage?

Choosing the right mortgages for first time buyers

Choosing the right mortgages for first time buyers

I was asked on the Q&A forum: What is a fixed rate mortgage and how do they differ from others?

Answer: Fixed rate mortgages are very popular and come in fixed rate terms of 1,2,3,5 and 10 years. A fixed rate mortgage means that the interest rate you pay is fixed for a set period of time. This means that it will not change over the fixed term period.

For example, if you have a 2 year fixed rate mortgage at 5%, this is the rate you would pay for the first 2 years of your mortgage. After the 2 years are up, your mortgage would then revert the the banks standard variable rate. Simple!