What is a fixed-rate mortgage?

What is a fixed-rate mortgage?

When buying a house, especially for the first time, you will be faced with a variety of challenges, including selecting a mortgage broker and mortgage deal, before facing the conveyancing process with the support of a trusted solicitor.

When selecting a mortgage deal, you will be faced with the option of obtaining a fixed or variable-rate mortgage. A fixed-rate mortgage means that the interest rate on your mortgage will remain the same for the duration of your mortgage deal. With a variable-rate mortgage, your interest rate (and therefore your monthly repayments) are subject to fluctuations, meaning they can go up or down depending on the state of the market.

Fixed-rate mortgages

Deciding on whether to get a fixed-rate mortgage or a variable-rate mortgage will depend on your individual situation.

Fixed-rate mortgages allow you to potentially ‘lock in’ a cheaper mortgage rate to pay for an extended period if you get your mortgage at a time of low interest rates. Ultimately, this could mean that you pay less overall for your mortgage. 

Is it better to get a fixed or variable-rate mortgage?

The market is unpredictable, so a variable-rate mortgage could mean more expensive mortgage payments if interest rates were to increase in comparison to a fixed-rate mortgage.

Similarly, during a time of decreasing interest rates, those on a variable-rate mortgage could pay reduced mortgage payments compared to a fixed rate. 

These market fluctuations are impossible to predict. Even though there are often patterns in how a market operates, there is always a risk of external shocks – like the coronavirus pandemic – that economists cannot foresee.

How does a solicitor help during the mortgage process?

When you get a mortgage, your solicitor will draw up the mortgage deeds, transfer the title of the property and handle the related finances.

A mortgage deed states that you and your lender have agreed to use your property as security to protect the mortgage. Your solicitor will take you through the deed in detail to ensure you thoroughly understand the terms.

A transfer of title is a legal process carried out when the ownership of a property is changed from the original owner to the new owner. There are a variety of circumstances where a transfer of title may be required.

Solicitor for mortgage

Once you have decided on a mortgage deal, you will want to apply for your mortgage, wait for a mortgage offer, and finally buy your new home.

Whether mortgaging or remortgaging your property, it is best to instruct a trusted solicitor to support you through the process, to avoid any unforeseen complications and additional stress.

At Templecorporate, we have an experienced team of residential property solicitors in Marylebone on hand to help you when mortgaging or remortgaging. make an online enquiry.

With a new property, or new mortgage, your financial circumstances are altered. Therefore, we recommend updating your Will to reflect your finances, helping to ensure that your family are protected should the worst happen. Speak to our team about writing or updating your Will today.