A fixed rate of interest is set for a period of years, usually 2, 3 or 5 years. With this type of mortgage you will know exactly what your monthly payment will be, no matter what happens to the Bank of England base rate. This could be a good option for first time buyers who need to know what their monthly outgoings will be.
Tracker Mortgages
These mortgages track the Bank of England base rate at an agreed fixed percentage above the base rate. Therefore the amount you pay will increase or decrease when the base rate rises or lowers. This type of mortgage is ideal if you feel the base rate will reduce.
Interest Only Mortgages
The monthly payments for this type of mortgage will be lower than other mortgages as you are not repaying any of the capital. Suitable for the short term only or for people with substantial investments that can be used to repay the mortgage. These mortgages are for an agreed length of time.