Fixed rate mortgages are ideal for people who want certainty and who want to be able to regulate how much they will be spending each month. 

With a fixed rate mortgage the amount you repay the lender each month can be at a fixed interest rate for a certain period of time, regardless of the interest rate in the market place. It is common for lenders to offer rates fixed for a period of 2 to 5 years, but shorter and longer periods are available. At the end of the fixed rate period the interest rate will normally convert to the lenders Standard Variable Rate.

These types of schemes are good value if interest rates look set to rise in the early years of a mortgage. However, a fixed rate also means you could end up paying more than everyone else if general interest rates fall below the fixed figure you're mortgage has been set at. But that's the risk you take in exchange for having certainty about how much you will pay each month.

With a fixed rate mortgage lenders often apply an Early Redemption Charge (ERC). This acts as a ‘lock-in’ making an often heavy charge for borrowers paying off their mortgage early. Watch out – the ERC can sometimes last longer than the fixed rate period e.g. a 3 year fixed rate with a 5 year ERC.

We can advise as to whether a fixed rate mortgage is suitable for you and discuss the other options available.