Fixed rate mortgages
A fixed rate mortgage is a loan secured against the value of a property where the interest charged by the lender is fixed.
This means that the borrower is protected against rises in the UK's base rate of borrowing, but also cannot take advantage when it falls.
Fixed rate mortgages generally charge a higher initial rate of interest than tracker or variable rate mortgages.
The period for which the mortgage is fixed is generally limited (typically to two years) and penalty clauses often apply to people seeking to pay off their mortgage early during this period.
After the period of the fix the interest rate charged by the lender typically reverts to the bank or building society's standard variable rate.
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