Fixed Rate Mortgage

If you need to have the financial security of knowing that your monthly mortgage payments will always remain the same then you should look into a Fixed Rate Mortgage. This type of mortgage will provide you with the ability to base your monthly finances around your fixed monthly mortgage repayment. Fixed Rate Mortgages are the right kind of product for you if you are concerned about the changes in mortgage rates and how this might impact you. The fixed rate mortgage will offer you the security you require throughout the term of the fixed rate period that the rate offered will never change and your monthly payments will remain the same through the duration of the fixed period.

Lenders usually market the fixed rate mortgage product under a two to ten year period. Throughout the life of the fixed rate period, the interest rate will always remain the same. As the lenders interest rates are based around the Bank of England interest rates, if there are any changes to the base rate, the lenders fixed rate will not alter for the duration of the fixed rate term. Therefore, you can feel secure that you have signed up for an agreed period where you will not see the interest rate change should Bank of England rates change.

If you are considering a mortgage, you should prepare to visit your current lender who will be happy to provide financial advice on all the current Fixed Rate Mortgage deals available. Alternatively, other high street lenders or specialised lenders through the internet can also offer Fixed Rate Mortgage advice. If you feel you need further advice, you can arrange to meet with an Independent Financial Advisor as well as a mortgage broker who will be happy to assist with your research and to provide further clarity with regards to this type of mortgage. It could be beneficial to you to check with various lenders in order to gain the best deal on offer as you could be losing out on a better deal if you stay with the same lender at all times.

Interest Rates on Fixed Rate Mortgages will be explained as an “Annual Percentage Rate” (APR). The APR will be fixed for a certain period which will be agreed between the borrower and the lender. In order for you to tie-in to the agreed rate for a set period of time, the lender may charge you and arrangement fee which will ensure that you will be paying the agreed rate. At the end of the fixed rate period, you will be put back onto the lenders variable rate but will have the option to apply for another fixed rate mortgage product with their existing lender or an alternative lender offering a better deal. It should be pointed out that should you repay the mortgage earlier than anticipated, you could be subject to early repayment penalties. The lender can impose penalties on you such as charging you two months worth of mortgage interest should you repay the loan early.

Most lenders are now willing to accept online applications for Fixed Rate Mortgages. The lender that you have made your application to for the Fixed Rate Mortgage will have to assess your financial background using a mandatory credit scoring system. This is where they will check the potential risk associated with lending you the money for the mortgage. The credit check will be look at factors such as employment history, monthly expenditure and current debt. The value of your home will also have to assessed by the lender to ensure that the loan is compatible with the value of your property. This also allows them to see if there is any great risk in approving the loan on the property that you have agreed to mortgage.

The completion of the mortgage will usually take place through a solicitor where they will receive the funds from the bank to be paid onto the vendors’ solicitor for the property. The timescale for this can vary greatly depending on your situation with regards to the property that you are purchasing.