Demystifying the concept of fixed mortgage deals

Some frequently asked questions about fixed rate mortgage deals in the market

08:02 25 January 2014

If you are looking to purchase a home with a mortgage, it is essential to have your facts straight about the various mortgage deals in the market. The housing finance market is a very tricky one especially considering the rippling effect of the global financial crisis that cripples how people buy houses. However, there are mortgage deals out there that will make your getting a house smooth sailing.

The following are some of the frequently asked questions that most people have about where the fixed rate mortgage deals in the market.

What is the current financing situation like?

The Bank of England has set the interest for other lenders to follow when setting their mortgage packages. The fixed rate mortgage deals at present have brought ownership of houses closer to the people. While interest rates are set to go upward, the fixed rate deals insulate people against feeling the heat of this shift.

Each lender has their own set of guidelines to ensure the smooth handling of the fixed rate mortgage deals. Interest rates change over time and there is no stopping that. There are many factors behind this shift. For example, the term of the interest rates and value ratio. The anticipated fixed interest of most homeowners seeking to remortgage their home is around 3.5 per cent.

The period of the fixed interest has lapsed, what next?

When scouting for mortgage deals it is important to consider what next after the fixed rate period ends. It is important to note that once the period is over, you will have to pay the variable interest rate, which is similar to variable rate that lender offers you. Mortgage payments will be set to go up. The important thing you have to consider is the penalties you have to pay if and when you switch your mortgage.

The above are just some of the things that you have to think about when you are looking at mortgage deals.