Fixed Rate Remortgage

Fixed rate remortgage is where the rate of interest is fixed for a preliminary period say for example it will be fixed for 2 years or can even stretch up to 5 years. After the fixed period ends, the interest rate will normally revert to the Standard Variable Rate. With fixed rate remortgage the monthly repayments remain fixed for the initial period regardless of the change in the interest rate at The Bank of England. This helps the borrowers to budget accurately, which is often important when the mortgage is taken out at first. The only real disadvantage of a fixed rate mortgage is if interest rates fall during the mortgage term. You might then find yourself paying more than you would have done for a variable rate mortgage.

One the most interesting aspect of remortgaging with fixed rate is that you will have complete knowledge of the amount of the monthly repayment over the span of the agreement. For the home buyers with low income will know that the monthly payment can be met for the given time period.

For first-time buyers who mostly stays on a tight budget, finds fixed-rate mortgages more appealing, as it will be easier for them to provide a stable monthly repayment to be made against the mortgage.

On the other hand, there is just one major disadvantage of buying Fixed rate Mortgage and that is if interest rates fall during the mortgage term. You might then find yourself paying more than what you would have paid for a variable rate mortgage. Also, sometimes there are additional fees that you might be required to pay at the time of arranging the fixed rate mortgage.