Fixed Rate Mortgages
Fixed rate mortgages guarantee a specific rate of interest for the life of the loan. Payments are also fixed. Most commonly, this is for between one and five years, though it can be as long as ten or even fifteen years.
As a rule, the longer the fixed period, the higher the starting rate of interest.
A lender will not want to commit to lending you money at a really low interest rate for ten years when there is a fair chance that during that period the general level of interest rates may rise above the rate at which they are lending you money.
The lowest interest rates are often found with deals that are fixed for
two to three years.
Click for more mortgage glossary terms relating to remortgaging.