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Choosing Fixed Rates - With a fixed rate mortgage it will have the same monthly premium throughout the mortgage life. It is not often the cheapest product on the market but that is the penalty for knowing the constant cost of the mortgage.
It also means that whilst interests rates are rising it is a very good product as the fixed rate will remain the same but on the other hand if the interest rates fall unfortunately the fixed rate payments will not, they will still remain constant.
Fixed rate mortgages are easy to understand and have the advantage of allowing the borrower to calculate their monthly outgoings because the repayments will be the same every month. This product is especially good for those on a low budget or for first time buyers.
During the term of a fixed rate mortgage re-mortgaging cannot take place without incurring early redemption charges that can sometimes be rather high.
The choice of the length of the product is a difficult one as it can depend on the likelihood of rate increases or decreases, the borrowers financial commitments and taking into account the lack of flexibility. Some products may allow the borrower to move house taking the mortgage to the new premises other will not and a penalty would occur if a move were made.
The best advice is to think carefully taking into account, finances probable bank rate and future plans.
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