why use fixed rate mortgage?

daxu

Hello,

I have a question. Why lots of people perfer a fixed rate mortgage? The rate is quite high (more than 5 in most cases I saw). Those variable rates have much cheaper rates for the first 2-3 years, and after that, we can always switch.

So why use fix rate mortgage? I am confused.

Thanks

Jerry

payless

lots of fixed rates lower than you mention

herbiesjp

People who have a tight budget and who cannot afford to see their mortgage payments rise

Woby_Tide

I'd say barely any lenders standard variable rate beats a fix, lots of 2-5 year fixes way under 5% at the moment, but not many SVR's(in fact nil SVR's I'd say....)

rchddap1

There is a lot of comfort in a fixed rate. For that length of time you know exactly what you will be paying each month come hell or high water. Its much easier to plan around.

vickylee

I prefer fixed rate so I know exactly how much I'll be paying, and there's no risk of a dramatic increase.

Ian_W

Read Martin's article about fixed v variable HERE

Don't know where you got your info though. Standard variables are all more expensive than fixed, discounted variables are around the same price. Both do what they say on the tin - fixed gives you certainty, variables let you "enjoy" the interest rate ride - up or down.
Where she goes - nobody knows!!
Your choice though ... ENJOY.

daxu

Oh, I was wrong about the rates.

Sorry.

jo_b_2

Fixed rates provide security and help people to budget. You can get very good rates and, yes, they may appear higher than other offers but they will remain at that rate whilst other rates can increase.

I took out a fixed rate with A+L two years ago. Am still paying 3.79%. Would have been kicking myself if I'd chosen a discount rate.

Of course, rates can go the other way but this offers peace of mind. Each to their own. Everybody's circumstances are different.