Fixed Rate Mortgage
A Fixed Rate Mortgage is a mortgage loan where the rate of interest is fixed for a certain time period, usually 2, 3 or 5 years.Fixed rate mortgages are popular with people who want long term stability, as they are not as volatile as variable rate mortgages and not subject to changes in the base rate, which is set by the Bank of England.
After the determined timer period the mortgage changes to a variable rate mortgage, which is usually at a higher rate of interest. At this time many people choose to change mortgages and re-enter another fixed rate period.
* This article only applies to mortgages in the United Kingdom.