WE CAN ARRANGE YOUR MORTGAGE
With a fixed rate mortgage,
as you would expect, the mortgage rate is fixed for a set period of
time, so no matter what movements occur in the lender's standard
variable mortgage rate (or the Bank of England base rate), the borrower's arrangement is fixed and,
therefore, so are the monthly mortgage payments. This kind of
arrangement would suit someone who likes to know where they stand.
mortgage deals rely on the
mortgage lender obtaining fixed amounts of funds at a fixed rate from
the money markets, and releasing these at a margin. Once the funds are
exhausted the lender normally returns to the market for further
The rate at which the fixed rate mortgage lender
is able to offer the funds is dependent on what rate they were able to
obtain them at, and the margin they need to make.
As a fixed rate mortgage
borrower, if the standard variable mortgage rate falls below the fixed
rate, hard luck. If it rises above, lucky you.
Although a fixed rate mortgage
gives comfort during its term, the borrower has to be aware that when it
ends, like all other schemes, the borrower reverts to the standard
variable mortgage rate. Although an advantage, if the mortgage rates
have dropped in the meantime, it can be a shock if the standard variable
mortgage rate has shot upwards during this time. If the deal came with
no "extended tie-ins" (which binds the borrower to stay on the variable
mortgage rate for a period of time after the fixed rate ends), then a
remortgage can always be arranged and another deal taken, say a discount
this time, to lessen the payments.
Recently the British Government has been keen to get the UK borrowers to
take up long term fixed rate mortgages,
with the emphasis on a rate fixed for 25 yrs.
no matter how many lenders produce such an offering, very few indeed
seem keen to take it up, and some lenders have withdrawn the product
after only a few months.
No information on this website is intended to constitute advice.
This site contains a summary of the information relating to the
products and is not intended to promote any specific mortgage or
insurance product or provide mortgage or insurance advice. It is for
information purposes only.