Is it time for you to look at your mortgage in return for a new fixed rate mortgage?

As we are seeing interest rates crashing to an all time low, now is an excellent time to be hunting for a new mortgage offer in the hope of reducing your monthly outgoings, and hopefully a lot of money over the long term. But if you are wanting to compare mortgage interest rates , what precisely are all of these different types of mortgages available from the lenders?
To start off with, for about a third of home owners, the fixed rate mortgage is the preferred type of mortgage. With this type of mortgage you agree with your chosen lender that for a certain amount of time you will pay a fixed rate of interest. The fixed term duration might be a few months up to a few years, it depends on the offers available on the market. How attractive the interest rate is will depend on how long you are signing up to it.
The briefer the time period, the less chance there is to the lender that the rates could rise in that time period, so normally the interest rate offered is usually more favourable. It is this fixed aspect of the mortgage that many home owners do want. For the agreed time you know precisely what will be spending on your mortgage. There can be no interest rate increase surprises to impact your budget. You know that unless you change your mortgage, precisely what you will be paying. But this is not solely an advantage, it is also seen as a disadvantage. If interest rates do drop further, as has been taking place at the moment, then the amount that you are paying doesn’t benefit.
And this is the gamble of this sort of mortgage. You know exactly what you will be paying, regardless of whether interest rates increase or decrease. Once your fixed rate mortgage has come to an end, you can possibly then have a tie in period with the lender for which you have to stay with the lender on their variable rate mortgage. This is the return for the lender when they have given you a good fixed rate mortgage. A variable rate mortgage is the basic mortgage that a lender will offer. It is their basic no frills mortgage and changes with the base rate, although not always following the base rate exactly.
Usually mortgage brokers will suggest that all customers on the lender’s variable rate mortgages should review their mortgage and think about switching to another mortgage, or lender. It is usually not reduced in any way and is at risk of increasing with every rate change. Quite often this type of mortgage is seen as the lender’s way of earning money. They are typically no frills, no reductions and a sign that you need to be looking at your mortgage. If this is what you have currently got, then it is well high time that you decided to compare mortgage interest rates and find yourself a brand new mortgage. If you want to start saving money on car loans - read how a simple usage of auto loan calculator can help you to do that. Related posts: Is Now The Chance To Swap To A Fixed Rate Mortgage?
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