Fixed Remortgage Rates
Fixed Remortgage Rates
What are Fixed Remortgage Rates?
Fixed Remortgage Rates are pretty much what they sound like. They are mortgages for which the rate of interest charged, and therefore the monthly amount payable, is fixed for a number of years. This can be for as little as a year or two, before reverting to the mortgage companies standard variable rate.
Fixed Remortgage Rates – The Advantages
The advantage of choosing mortgages with Fixed Remortgage Rates is all around the the monthly repayment, and the fact that it is fixed for a given period of time. This means you can budget accordingly, and not worry every month about what the Bank of England will do to base lending rates.
With a small change in interest rates having potentially a significant impact on monthly repayments for those on variable or tracker mortgage rates, this peace of mind can be worth every penny to some borrowers.
Fixed Remortgage Rates – The Disadvantages
When interest rates are low, those choosing Fixed Rate Mortgages will find themselves paying a higher rate of interest than on offer to those opting for some kind of variable rate or tracker rate mortgages.
I have also known those on Fixed Mortgage Rates pay huge Early Redemption Charges in order to switch to an alternative mortgage product when the rates on offer there became substantially lower than their current Fixed Mortgage Rate Deal.
Choosing Between Fixed and Variable Mortgage Interest Rates
To my mind it is always a gamble. Unless you can reliably predict whether mortgage interest rates will go up or down there is an element of chance as to whether you will end up quids in with the choice you make.
When choosing between Fixed Remortgage Rates or Variable Rate Mortgage Products the important thing is to do your homework, calculate the costs in a few different scenarios, look closely at both up front charges and early redemption charges, and if you are still struggling to choose then seek the advise of an Independent Mortgage Advisor.
