Monday, 26 November 2007

Fixed Rate Mortgages

With a fixed rate mortgage deal, you agree with the lender that for a certain period the interest rate charged on the mortgage will not change. This fixed period may be a year, 2 years, 3 years or any time span that the lender offers to you.

In most cases the fixed period starts not when you complete the mortgage but when the lender first advertises the mortgage. Therefore, if the mortgage is advertised for several months, then your fixed rate period could be reduced by a few months.

Once the offer period is over, depending on the original terms of the offer you might have to pay the lender's variable rate for a certain amount of time or you may be free to switch to another product by that lender or you may be able to pay off the mortgage entirely.

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