What is a fixed rate mortgage?

A fixed rate mortgage guarantees that your mortgage payments will stay the same over a set period of time until the fixed term ends. Fixed mortgages typically have an initial period that can run from two to 10 years, giving you several years of repayment security. Start your comparison today. 

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Credit will be secured by a mortgage on your property. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Written quotations are available from individual lenders. Loans are subject to status and valuation and are not available to persons under the age of 18. All rates are subject to change without notice. Please check all rates and terms with your lender or financial adviser before undertaking any borrowing.

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How does a fixed rate mortgage work?

A fixed rate mortgage allows you to borrow money to buy or remortgage your home at a fixed rate of interest for a set period. Each month you will pay the same amount, no matter what happens to the Bank of England base rate or your mortgage lender’s standard variable rate (SVR).

Is a fixed rate mortgage a good idea?

The choice between a fixed or variable mortgage often comes down to your own individual appetite for risk and how easily you could withstand any increase in your mortgage payments. For example, a fixed rate mortgage protects you when rates are on the rise, but you could also end up paying over the odds if interest rates fall during the fixed rate period.

Is my fixed rate mortgage coming to an end?

Your existing lender should contact you, usually six months before the end of your current fixed rate deal, advising you when this ends. You can choose to either remortgage with them or look to find another deal from an alternative mortgage lender.

Can I pay off my fixed rate mortgage before it ends?

Fixed rate mortgages typically come with an early repayment charge (ERC). This is usually a percentage of your total outstanding mortgage balance. The percentage decreases each year as you get closer to the term ending. In some cases, you can save money overall by remortgaging early, but only if you can find a rate that still saves you enough in interest after paying your ERC. A mortgage broker can help you to work out if it is worth moving your mortgage early.

Can I overpay my fixed rate mortgage?

Most fixed rate mortgages will allow you to make overpayments – typically up to 10% of the outstanding balance per year. If you are in the earlier years of your mortgage, these overpayments can dramatically reduce your overall mortgage term.

Which fixed rate mortgage is best?

The best fixed rate mortgage can depend on the rate, term, fees and any early repayment charges, which means that the best option will depend on your own circumstances and priorities. However, in terms of overall value, in the last six months, both the average rates for two-year and five-year fixes have reduced. Two year fixed rate mortgages have dropped from an average of 2.49% in March to 2.46% for September, while the average five year fixed rate average has fallen from 2.89% to 2.79% in the past six months. With the overall change being downward, this is good news for borrowers, resulting in lower mortgage repayments during the fixed term of new mortgages. However, you may also consider a fixed rate mortgage based on its product fee, and analysis shows that the average fees for all fixed rate mortgages over the past six months increased from £549 in March 2019 to its current average of £553.

Six of the best fixed rate mortgages*

Top of our fixed rate charts is a two-year fixed rate mortgage from Barclays Mortgage, offering a rate of 1.24% (3.8% APRC) fixed until 31 October 2021, before reverting to a variable rate of 4.24%. With a product fee of £999 the maximum LTV of 60% is likely to make this popular with those looking to remortgage – although the deal is open to all borrowers – and it applies to loans of between £5,000 up to £2 million. The incentives package includes free valuation for all, while remortgagers also have a choice of free legal fees or £200 cashback. Overpayments are permitted.

Second is the two year fixed rate deal from HSBC. Offering a rate of 1.24% (3.7% APRC) fixed until 31 January 2022, this is a mortgage for all borrowers seeking a maximum LTV of 60% and a loan of between £10,000 and £5 million. At the end of the fixed rate term, this reverts to a rate of 4.19% variable for the remainder of the term. Overpayments are permitted and the product fee is £999. Incentives include free valuation, and those remortgaging also get free legal fees.

Next up, is the Post Office Money’s two year fixed rate mortgage offering 1.27% (4.2% APRC) fixed until 30 November 2021, before reverting to 4.74% variable for the remainder of the term. This two-year deal is for borrowers looking for a 60% LTV and who require a loan in excess of £25,001, while the maximum loan is dependent on LTV. The product fees are £1,495 and there is also a deferred arrangement fee of £195 payable for an early exit from this deal. It includes the incentive of free valuation and overpayments are permitted, but applicants must an income of at least £20,000.

NatWest has a mortgage deal with a rate of 1.28% (3.8% APRC) fixed to 31 January 2022 before reverting to 4.24% variable for the rest of the term . This deal is available to first and second-time buyers who have a deposit or equity of 40% or more able to apply. The minimum loan available is £25,000 with a ceiling of £2 million. The product fees of £995 are fractionally less than the lowest-rate Barclays offer with £250 cashback available and overpayments permitted.

The restriction to first and second-time buyers only is also carried by the Royal Bank of Scotland’s fixed mortgage deal of 1.28% (3.8% APRC) fixed to 31 January 2022, before reverting to 4.24% variable for the remainder of the term. With a maximum LTV of 60%, this deal is available to house purchase customers seeking a loan of between £25,000 and £2 million. Once again, the product fees are £995, overpayments are allowed and it includes the incentives of £250 cashback.

The final deal in our six of the best fixed rate mortgages roundup is Santander’s offer of 1.28% (3.6% APRC) fixed until 02 December 2021 before reverting to a rate of 4.00% variable. The product fee is £999 and once again, this product is only available for first and second-time buyers who have a deposit or equity of 40% and need a loan of between £6,000 and £1 million. The incentives package consists of free valuation up to a maximum of £1,190 for properties under £2.5 million and £250 cashback. Overpayments are, as expected, permitted.

*Information correct as of 17.09.19 – for the most up-to-date deals, please visit our mortgage comparison charts here .

Should I choose a two, three or five-year fixed mortgage?

One of the biggest benefits of fixing your mortgage for a set period of time is the fact that you’ll know exactly what your repayments will be for the duration of the fixed term. This is a great way to budget effectively, as well as protecting you from any interest rate rises while you are locked into the deal. Fixed rate mortgages of two, three or five years are short to medium-term agreements.

Choosing a short or medium-term fixed rate mortgage means that you’ll be protecting yourself from any unexpected interest rate rises for the duration. While providers are currently offering some of the lowest interest rates on record, this is attractive to many people who take the view that rates are more likely to rise than to fall. However, by choosing a two, three or five year fixed rate mortgage, you are not locking yourself into a deal for too long, giving you flexibility if rates do drop.

Pros and cons of a short-term fixed mortgage

  • You are not ‘locked in’ to a set interest rate for more than a few years, enabling you to seek a new deal if there is a better offer available.
  • You can budget effectively, safe in the knowledge that for the agreed fixed term period your mortgage repayments won’t change.
  • You are protected from unexpected interest rate rises during the fixed period.
  • You are likely to have a higher interest rate for a fixed rate compared to a variable rate mortgage.
  • You could incur additional fees each time you need to remortgage, which will likely be more often with a shorter-term fixed mortgage.
  • If interest rates were to fall further, you will not benefit as you may be locked into a higher rate.

Should I get a 10 or 15-year fixed mortgage?

Products with longer initial fixed terms, such as 10 to 15 year fixed rate mortgages, are relatively new and offer the opportunity for borrowers to freeze their repayments over a longer period. The last few years have seen historically low interest rates, and some people take the view that these cannot last forever – consequently, 10 and 15-year mortgages are a way of avoiding interest rate rises in the long-term. Of course, this assumes that interest rates will not fall further but, in any case, borrowers will have the benefit of knowing what their repayments will be for a substantial portion of their whole mortgage term.

Pros and cons of a longer-term fixed mortgage

  • You can budget long-term with mortgage repayments that are unchanging over the fixed term of the deal.
  • If interest rates rise, you will benefit from being locked into a cheaper rate.
  • You still have the option of overpaying to chip away at your mortgage faster if you have the funds.
  • You will be ‘locked in’ with an interest rate for a considerable period of your mortgage. This means that you won’t be able to take advantage of favourable rates unless you exit the deal early, which is likely to result in a penalty.

Can I get a 30 year fixed rate mortgage?

It’s important to be clear here: A fixed rate term applies to a period within the overall term of the mortgage. For example, you could take out a mortgage over a total period of 30 years with an initial fixed rate term of five years. This means that for the first five years you can enjoy the benefits of a fixed interest rate. If at the end of this period you do not switch to a different deal, the mortgage will normally revert to the lender’s SVR for the remaining 25 years of the mortgage. However, once the five-year fixed period is over, you are perfectly able to look for another fixed term deal. You can do this at the end of each fixed period until the mortgage is repaid.

In answering the question above, there are currently no products available offering a 30-year fixed term. At present, the longest fixed rate mortgage deal available in the UK is for 15 years.

How much deposit do I need for a fixed rate mortgage?

The level of deposit that you need for any mortgage deal depends on both the value of the property you are buying and the mortgage deal you opt for. All mortgages have something called a loan-to-value (LTV) level that determines how much of a deposit or equity you need.

For example, mortgages for first-time buyers tend to have an LTV between 90% and 100%. With a 100% LTV deal, you don’t need a deposit at all (but you might well find that you pay a lot more than someone who does), while a 95% or 90% LTV product will mean you need to have a deposit equal to 5% or 10% of the property value.

In this example, let’s assume you are buying a house worth £150,000 with a first-time buyer deal at a LTV of 95%. You’ll need to have a minimum deposit of £7,500 (5% of £150,000) to obtain this deal. Higher values and higher LTVs mean you need a bigger deposit.

People looking to remortgage need to have as much equity in their home as the LTV demands. So for example, if you have a home worth £200,000 and there’s £100,000 left to pay on your mortgage, you have an equity level of 50%, meaning you can choose remortgage products with LTVs as low as 50%.

What is the longest fixed rate mortgage available?

Currently, the longest fixed term mortgage deals in the UK are for 15 years. However, you should consider very carefully and even take professional advice before committing to such a long fixed period. A lot can happen in 15 years, and you need to be sure that this is the right option for you.

Are fixed rate mortgages best for first-time buyers?

The answer to this depends on your individual circumstances, as well as the interest rate levels when you are buying your first home. First-time buyers are often attracted to fixed rate mortgage deals as they have the benefit of fixed monthly repayments. This allows first-time buyers to budget effectively – especially in the early years of a mortgage when money might be tight.

Can I get a fixed rate mortgage with cashback?

It’s perfectly possible to get a fixed mortgage deal offering cashback. Many deals come with an incentives package offering a range of helpful ‘free’ extras. This might include offers to help with the additional fees you will encounter in getting a new mortgage – such as a free valuation or help with legal fees. In some instances, a lender may offer you a choice between say free legal fees or a lump sum on cashback. Be sure to check the details carefully and consider whether you will get more from free fees or cashback before deciding.

Which fixed rate mortgages come with an offset account?

At the time of writing, there are 203 offset mortgages on the market, however only 126 of these are fixed rate products. Taken against the total number of mortgages available in the UK, this accounts for just under 2% of the market.

By far and away, the largest provider in the offset mortgage market is the Scottish Widows Bank with a market share of more than 40%.

Currently, Coventry Building Society offers the lowest interest rate for offset mortgages with two products at 1.49% and 1.59% at 65% and 75% LTV respectively. This is followed by Scottish Widows Bank also at 1.59% and a further Coventry Building Society product at 1.69% up to 85% LTV.

To find out the latest fixed rate mortgages with an offset account, go to our fixed rate mortgage comparison charts and filter for ‘offset’ under other refinements.
If you are considering an offset mortgage, then why not check out our online guide on the subject: What is an offset mortgage?

Can I borrow more on a fixed rate mortgage?

In short, no. Lenders go to great lengths to ensure that any mortgage you are offered will be affordable. Many of the checks and questions are in place to make sure that you pass an affordability check. It’s much better to be realistic about the size of mortgage you can comfortably afford than to concentrate on getting the biggest mortgage you can. If you want to learn more about mortgage affordability then see our guide on What are mortgage affordability checks?

Is a fixed rate mortgage a good idea for an investment property?

If you are buying a property to use as a home as well as an investment opportunity, then a fixed rate mortgage is certainly a very popular residential mortgage. That said, you may find that a different type of mortgage, such as a discounted variable or even a tracker may prove just as good or even better.

However, if you are buying a property with the intention of renting it, an ordinary residential mortgage product is not possible, and you’ll have to obtain a buy-to-let (BTL) mortgage. Even with this type of mortgage product, there are fixed term mortgages available for you to choose from.

Which is best: a tracker or a fixed rate mortgage?

The answer to this very much depends on your individual circumstances. Both have benefits and drawbacks that could influence which is right for you.
Let’s look at fixed rate mortgages first:

Pros and cons of fixed rate mortgages

  • Fixed repayments allow you to budget effectively. For the fixed term of the mortgage, you’ll know that your repayment will be the same month in, month out.
  • You’ll be protected from interest rate rises during the fixed period.
  • If the interest rate drops during the fixed period, you could find yourself paying over the odds for your mortgage.
  • If you need to change your mortgage before the end of the initial fixed term, you will likely incur an early repayment charge.

So, what about tracker mortgages?

Pros and cons of tracker mortgages

  • Tracker mortgages don’t keep you ‘locked in’ to a deal, hence if something unexpected happens, you can more easily switch to a new deal.
  • If the base rate is low, you pay less for your mortgage and your monthly repayments are smaller.
  • If interest rates go up, your monthly payments could go up – especially if your rates are not capped at a certain level.
  • It’s harder to budget with a tracker mortgage. Sure, your repayments might start off low, but this can change rapidly – going up as well as down.

Are fixed rate mortgages portable?

This depends on the fixed rate mortgage deal you choose but, in general, yes, most products are portable. This means that if you move to a new house you can transfer your mortgage with you when you move but subject to your lenders willingness to continue to lend to you based on your new property.

Where can I get advice for a fixed rate mortgage?

There are a number of places where you can get more information about a fixed mortgage. An independent mortgage broker is your best bet for unbiased advice. Not being affiliated to any one lender, they can give you a whole of market overview and not just the products that their mortgage company is selling.

Click here to talk to a mortgage broker now.

Can a fixed rate mortgage go up?

Not during the fixed rate period, no. Hence, if you have chosen a two-year or five-year fixed rate mortgage then your payments for two or five years will not go up or down. However, when the fixed period ends, you’ll likely be moved across to a lender’s SVR, which is often higher than the rate you have been on.

Do fixed rate mortgage payments change?

No, the whole idea of a fixed rate mortgage is to ‘freeze’ your repayments for the period of the mortgage deal. For example, if you have a three year fixed rate mortgage then your rate will not go up or change for three years. However, when this period ends, you will likely be put onto your lender’s SVR, which means your payments will go up as they are often higher than the fixed rate.

Is a fixed rate mortgage halal?

Strictly speaking, there is no such thing as a ‘halal’ or sharia-compliant mortgage. Instead, banks that operate under Islamic principles can offer you a product called a house purchase plan. This allows you to purchase a home or property in compliance with sharia law.

House purchase plans are open to both Muslim and non-Muslim applicants.

To find out more about how ‘halal’ house purchases work and where you can get one, take a look at our online guide to Islamic/sharia-compliant mortgages – House purchase plans.

Can I get a fixed rate mortgage with bad credit?

Certainly getting a fixed rate mortgage if you have a bad credit rating may mean you have slightly less choice and may pay more for it, but this doesn’t mean that there aren’t products and lenders out there who will consider your application.

To find out more, why not look at our online handy guide: Is your credit rating good enough for a mortgage?

Alternatively, you can start looking yourself by checking our fixed rate mortgage comparison chart or get some advice by speaking to an independent mortgage broker.

Can I get an interest-only fixed rate mortgage?

Yes, but only if you are retired. An interest-only fixed rate product is often called a retirement interest-only mortgage or RIO mortgage. These are designed for people who have come to the end of their interest-only mortgage but the endowment policy or other repayment strategy that was meant to pay off the balance of the mortgage is not large enough.

To find out more about RIO mortgages, take a look at our online “What are Retirement Interest-Only (RIO) mortgages?” guide.

What is the average fixed rate for mortgages in the UK?

Mortgage rates in general tend to fluctuate from day to day – and in some cases from hour to hour – so the ‘average’ fixed rate mortgage is a constantly moving target. However, if you really want to see what kind of fixed rate mortgage products – and the cheapest rates - out there are, then just go straight to our fixed rate mortgage comparison charts. You’ll be able to get a whole of market view of the choice, as well as being able to find the exact product that suits your individual needs.

What to do when you're coming to the end of a fixed rate mortgage deal

Up to six months before the end of your fixed rate period, start looking at the best fixed mortgage rates available to see if you can save money. When your fixed rate deal ends, you'll usually go onto your lender's SVR, or sometimes a tracker rate. These don't offer the same payment security as a fixed rate, and, depending on the interest rate climate, could mean that your payments make a sudden jump.

On the flipside, it can sometimes be the case that the variable rate you go onto is lower than the fixed rate you've been paying. While this may come as a pleasant surprise, remember that your provider’s default variable rate is likely not the most competitive on the market, so you might be able to save even more by finding a different deal to remortgage to. If you can, you may want to set the wheels in motion for a remortgage several months before your fixed rate period comes to an end, to avoid accidentally defaulting. By making arrangements in plenty of time, you would be able to simply wait until the fixed rate period finishes (to avoid any ERCs) to remortgage.

Depending on the wider mortgage market, you may be tempted by a variable rate deal. However, those used to the security of a fixed rate mortgage may not be prepared for their repayments changing, so do your research. If you do decide to move your mortgage to a variable rate, consider keeping your monthly mortgage payments the same. This overpayment will reduce the term of your mortgage more quickly.

Moneyfacts tip Derin Clark

If you're still not sure what kind of mortgage is right for you, you could consider using a mortgage broker. Not only can they provide valuable advice, but they may also have access to mortgage deals that are not available directly on the Moneyfacts charts. 

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