Fixed Home Loans

Each type of mortgage deal has pros and cons. So you will need to decide which type of mortgage deal is most suited to your situation.

Fixed-rate mortgage deals

Typically, this type of mortgage will be taken out for over a fixed period of time, namely 2, 3 or 5 years. This method of repayment can be likened to taking an insurance policy out on the interest rates going up. So for as long as the agreed term, your repayments will remain at the same level. The fixed-rate mortgage model will also mean that, if interest rates fall rapidly you will still have to pay the set, agreed repayment amount. The balance between fixed variables is dependent on a number of complex interactions such as the current market view of long and short-term interest trends.

The benefit of the fixed mortgage deals is that you know exactly where your money is going and how much money you need to pay out per month.

Fixed rate loans have a stated interest rate that does not change over the life of the loan, whereas the rates on adjustable rate loans are linked to an index and change as the index rate changes. The main advantage of a fixed-rate loan is that the borrower is protected from sudden and potentially significant increases in monthly mortgage payments if interest rates rise.

These type of loans won't suit all borrowers but are particularly popular with first time buyers looking to ensure they keep their mortgage payments steady for a set period.