Fixed Rate Mortgages - Cheap Mortgage Deals

This product is the one that most people understand as being a very standard product. It is popular with many first time buyers and those on a fixed budget.

The concept is that the rate of interest you pay each month does not go up or down. The repayments stay the same for as long as the fixed rate part of your mortgage is active.

The price of a fixed rate mortgage depends on the length of time you fix for and the amount you will need to borrow in relation to the value of your home. As a rule of thumb, the greater your deposit or amount of equity in your home, the lower the rate will be. The initial fixed period could be from as little as six months to 10 years or more. Deciding on the fixed interest rate period depends on how you believe interest rates are going to go.

The most popular terms are for 2 to 3 years. You should not fix the period for longer that you will be comfortable with as one of the disadvantages is the early redemption charges that could be included in your mortgage deal. Your initial fixed rate period deal will end but you will still be tied in to the mortgage. It is important to find out how long this period is for once the introductory deal is over.

Your mortgage will then be subject to the lenders SVR or standard variable rate. This tie in period could last for a number of years making it impossible to move your mortgage to a more competitive product or to remortgage with another lender.

Before taking out a fixed rate mortgage you need to consider the Bank of England's rate and the chances of it increasing dramatically over the next 10 or 15 years.