Correct at 30/06/2023
If you're looking for the peace of mind that a fixed rate mortgage can provide, L&C is here to help.
At L&C we do all the hard work on your behalf. We can compare the best fixed rate mortgages and find out which deals you’re likely to qualify for, but our service doesn’t end there. Once we’ve found the best fixed rate mortgage deal for you, we’ll support you through the application process from start to finish, making sure everything goes smoothly.
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A fixed rate mortgage is a type of home loan where the interest rate remains the same for a set period of time. The advantage of this is that you know exactly how much you’ll be paying back each month, making it easier to budget and plan for the future. The other main type of mortgage is a variable rate mortgage, where the repayment amount can fluctuate depending on interest rates - but with a fixed rate mortgage, your payments will remain the same, no matter whether interest rates go up or down. This type of mortgage is popular with first time buyers for the financial security they provide, and it may also be a good idea to go for a fixed rate mortgage if you’re concerned about meeting repayments if interest rates rise.
There are different lengths of fixed rate mortgages to choose from, and the type you opt for will depend on your individual circumstances. With a two year fixed rate mortgage, your interest rate is fixed for two years, and it’s usually the cheapest option. It can be a great option if you only need certainty in your budget for a short period, or if you’re planning to move again after a couple of years.
You can also get 3 or 5 year options, which offer a fixed repayment rate for the relevant period. These may suit you if you want to know exactly how much you need to budget for every month for a longer period. You can also get a 10 year fixed rate mortgage, or even longer, where your repayments will remain the same for a decade or more.
A potential downside of a fixed rate mortgage is that you’re locked into paying the same amount each month, regardless of changes in interest rates. So whilst you won’t have to pay more if interest rates go up, you also won’t benefit from a reduction in your monthly payments if interest rates go down during your fixed rate term.
Want to learn more? Check out this post for fixed rate mortgages explained in more depth.
If you’ve decided to opt for a fixed rate mortgage, it’s worth knowing how it works. Whether you opt for a 2 or 3 year deal, a 5 year fixed rate mortgage or a 10 year fixed rate mortgage, you’ll usually move onto your lender’s standard variable rate (SVR) when your term ends, unless you remortgage after the fixed term to another mortgage deal.
There will typically be Early Repayment Charges (ERC) to pay if you leave your fixed rate mortgage deal early. That means when choosing how long you want your fixed rate to be, you’ll need to think carefully about whether your circumstances are likely to change. Most fixed rate mortgages are portable, which means it can be possible to transfer your deal to a new property if you move home during the fixed rate period, but you should check the specific criteria of any deal before going ahead.
Whether you’re looking for a fixed rate remortgage, lasting 2 or 3 years, or a longer-term fixed rate mortgage over 5 or 10 years, L&C will find the best deal for you.
The eligibility criteria for fixed rate mortgages vary between lenders, but they will look at whether you can afford repayments on your mortgage. Lenders will need proof of your income, and you’ll usually be asked to provide three to six months of payslips. As well as looking at how much you earn, they’ll need to know how much you spend, so you’ll likely also have to provide bank statements, as well as details of any debts like credit and store cards, loans and car finance.
We’ll ask you about your future plans and whether your circumstances are likely to change, as you’ll have to pay an Early Repayment Charge if you need to redeem your mortgage before the end of your fixed terms - and the associated fees are usually hefty. Use our eligibility engine to find out how likely you are to qualify for a fixed rate mortgage.
Here at L&C Mortgages, we’re committed to helping our customers find the best mortgage on the market. We have access to over 90 lenders and we’ll scour the market to find you the best fixed mortgage deal for your circumstances. And what’s more, we do it all for free.
To improve your chances of being offered a good fixed mortgage deal, ensure you check your credit score before applying. This can be done via credit reference agencies like Experian, Equifax and TransUnion. If you notice any errors in your credit report, you can request that these be changed before applying for your mortgage, as discrepancies can sometimes affect your likelihood of getting a good deal.
If you’re looking for the peace of mind that a fixed rate mortgage can provide, L&C is here to help.
At L&C, we do all the hard work on your behalf. We can compare fixed rate mortgages and find out which deals you’re likely to qualify for, but our service doesn’t end there. Once we’ve found the best fixed rate mortgage deal for you, we’ll support you through the application process from start to finish, making sure everything goes smoothly.
When your fixed rate mortgage ends, you’ll usually move onto your lender’s standard variable rate (SVR) unless you remortgage to another fixed rate or another mortgage deal.
Most fixed rate deals are portable if you move house during the fixed rate period, but you’ll need to meet your lender’s criteria at the time, and if you need to borrow more, this is likely to be at a different rate.
Lenders will typically calculate mortgage interest on a daily basis, rather than using the old annual interest rate method. Calculating interest daily is a fairer method as it takes immediate account of any capital payments made.
It is possible to get a 1 year fixed rate mortgage, although this length of fixed rate deal isn’t always available. Most fixed rate mortgages run for 2, 3, 5 or 10 years or sometimes longer.
Yes, it is possible to get a mortgage with a 10% deposit. Otherwise known as 90% loan-to-value (LTV) mortgages, these mortgages will allow you to borrow 90% of the money required to buy a home, with you putting down the remaining 10% as a deposit. Some of these 90% mortgages are available on a fixed rate, which means the interest rate and the monthly amount you’ll pay back are fixed for a set period of time. However big your deposit, a lender will also need to check that you can afford the mortgage based on your income and other outgoings.
Yes, you can remortgage on a fixed rate mortgage. However, it’s important to understand the implications of remortgaging before your fixed term (whether it’s two, three, five or ten years) ends. If you want to change your mortgage before the end of your fixed term, there may be Early Repayment Charges to pay and these can be substantial. However, if you’ve already got to the end of your fixed term or it’s only a few months away, then now could be a good time to look around for a new deal.
The interest rates available on new fixed rate mortgages move up and down and the difference between two and five year deals is always changing. The longer the interest rate is fixed for, the higher the initial rate tends to be, but it can depend on your circumstances. Check out our mortgage best buys to see the best deals currently available and when you’re ready to apply, we’ll search the market to find the best fixed mortgage deal for you.
What is a fixed rate mortgage and how do they work? What is a variable rate mortgage? What is a tracker mortgage and how do they work?
Choosing the right mortgage for you can be really tricky.
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