Fixed rate mortgages

With a fixed rate mortgage, the interest rate is fixed for a period of time - usually between two and five years, but the term can be as long as ten. During this period your repayments will be a set amount, after which your mortgage reverts to a Standard Variable Rate (SVR).

Pros:

• Makes for easy budgeting
• For the duration of the set period, you'll be protected from any interest rises

Cons:

• If interest rates fall, you could miss out on repayment reductions
• Some fixed rate mortgages require you to continue with the SVR for a period of time after the fixed term
• Check for penalty clauses if you decide to change your mortgage after the fixed rate term