Fixed Rate Mortgage

One of the most popular types of mortgage available on the market is a fixed rate mortgage because the set monthly payments allow you to budget more effectively.  Fixed rate mortgages have a set interest rate for a certain period of time, often three or give years. Throughout this period of time, your mortgage payments will be exactly the same every month, irrespective of the Bank of England base rate.

If you have a tight budget fixed rate mortgages will be ideal for you as you won’t have to worry about the size of your next payment. First time buyers and those on tight budgets are not the only people to benefit from a fixed rate mortgage, they can also be ideal to lock in at times when the base rate is expected to rise. However, this does obviously have its drawbacks because you could end up paying more than base rate too. 

Rite Financial has lots of experience in finding mortgages to suit each customer’s personal circumstances, and can arrange the right fixed-rate mortgage for you. There are a few points specific to this type of mortgage that you really need to know about before signing up. We can ensure that you are fully informed about your mortgage before it is too late.

One of the most important things to know is how long the fixed rate period is going to last as they do vary between mortgages and providers. If you have found a deal with a really low rate of interest you might be more inclined to lock in for longer, perhaps as much as five years, but entering any fixed rate mortgage has an element of risk. Ideally, you need to know about the state of the market, and have an idea of whether interest rates are expected to rise and fall. By working with Rite Financial you can have access to our expert knowledge, aiding you to make the right decision about your mortgage.

As fixed rate mortgages tend to have relatively low interest rates, there may be penalties for paying off your mortgage early. Although you might not intend on repaying what you owe before you have to, your circumstances may change, so you should always know the terms just in case. This penalty, known as a redemption penalty, is quite common during the fixed-rate period and can sometimes cost thousands of pounds. You will also need to beware of lenders that take advantage of this and charge penalties at any point in the mortgage term. It’s really important that you avoid these agreements, if you’re working with Rite Financial have no fear as our experts will always point you in the right direction.

Deciding which mortgage is right for you is a big decision, and one that should not be taken lightly. Rite Financial can evaluate your finances and steer you in the right direction. There are some huge advantages to a fixed rate mortgage for some, but for others alternative mortgages will be more appropriate.