Fixed interest rates refer to the interest rate that is set for a specific period of time, for example a 2 year fixed mortgage. This means that the interest rate will not change during the period it is fixed for, regardless of any changes in market conditions.
One advantage of fixed interest rates is that they provide stability and predictability for you the borrower. Because the interest rate is set in advance, you will know exactly how much your repayments will be. This can make it easier to budget and plan for the future.
On the other hand, fixed interest rates may not be the best choice for borrowers if interest rates then decline in the future. In this case, a borrower with a fixed interest rate may end up paying more in interest than they would have if they had chosen a variable interest rate loan.
Overall, fixed interest rates can be a good choice for borrowers who want the security and predictability of a fixed payment amount, but it’s important to consider all of the available options and to carefully evaluate the potential risks and benefits before making a decision.
Please note that your home may be repossessed if you do not keep up repayments on your mortgage.