What is it?

If you have a fixed rate mortgage your monthly repayments will stay the same and you will not be affected by rises or falls in interest rates. Fixed rate deals for between one and five years are common, with longer and shorter deals also available.

What does it offer?

Fixed rate mortgages provide certainty and make it easier to budget, because you'll always know exactly what your mortgage payments are going to be during the offer period.

When the offer period ends your mortgage usually reverts to the lender's standard variable rate (SVR).

When is it worth considering?

If you are a first-time buyer your mortgage is likely to be your biggest monthly expense, so a fixed rate could prove useful in helping you to budget. A fixed rate is also worth looking at if rises in interest rates seems likely.

What should I be aware of?

You won't benefit from falls in interest rates. Fixed rate mortgages are generally cheaper than the standard variable rate. If the SVR rate goes down during your fixed rate period your payments won't reflect this.

Fixed rate mortgages typically contain early repayment charges These are often high, particularly at the beginning of the offer period, and can tie you in to your lender's SVR for a year or more after your fixed offer has ended.