A fixed rate mortgage does exactly what it says on the tin, no matter what is going on in the current mortgage market your interest and monthly repayments stay the same, giving you security with your monthly repayments. Sounds simple, but this is the mortgage market and nothing is as simple as it seems. If you are considering a fixed mortgage make sure you are all up to date on the available rates and what a fixed rate and entails today.
Broken down: A fixed rate mortgage stays the same on interest and repayments rates over the entire length of your initial period, this can be anywhere from 1 - 10 years, although the higher the fix term the less financial sense it may make as predicting the market 10 years down the line can be very rudimentary. If the interest rates go up whilst you are in your initial rate period you will be protected from any price hikes in your repayments, but by the same token if interest rates go down you may be paying over the odds for your mortgage.
If you are deciding that a fixed rate mortgage is for you, it always advisable to research the current mortgage market and any possible future trends within the market. Why? Since your interest rates are fixed for an initial period, no matter how the mortgage market pans out you should always make sure you are ahead of the game. Take a look at the mortgage rate trends over the past 12 months and talk to an advisor on whether they see interest rates are on an increase or a decrease. Obviously it is almost impossible to exactly predict the market, but speaking to an advisor and reading through financial articles should give you a base idea.
If it looks like interest rates are set to make a big increase then getting yourself locked into a fixed rate mortgage deal may be the best for your circumstances, so that if rates do increase your payments stay at the agreed rate for the entirety of your initial term. If rates are set to make a decline getting locked in to a fixed rate mortgage may not be the best for you as you could start paying over the odds for your mortgage deal with regards to the rest of the market.
Before you decide on any mortgage make sure you shop around. Compare online to get a good idea of how the mortgage market is faring and speak to a broker or a mortgage adviser at your local banks to make sure that you choose the right mortgage for you. The right mortgage suits not just your current circumstances but will suit any changes that may happen during your initial mortgage term.
Enquire about your mortgage with us today and we can put you in touch with a financial adviser which will give you free mortgage advice and will independently search the market for a deal that suits you.
The above post is intended to be informative but does not constitute advice - financial, legal or otherwise. Any opinions given are the author's own and do not necessarily reflect the views of SO Media or the Mitchell Farrar Group.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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