Fixed Rate and Interest only

Fixed Rate

With a fixed-rate mortgage, the interest rate you pay remains the same for a set period, so your mortgage repayments will remain the same, even if interest rates rise.
This type of mortgage is often available as a two, three, five or ten-year deal and provides peace of mind that your repayments will be the same for the duration of the fixed term.
If you choose a fixed-rate mortgage, you will need to think about arranging your next mortgage deal a few months before the current one ends, as when it does, you’ll be moved onto your lender’s Standard Variable Rate (SVR), which generally means you’ll be charged a higher rate.


With an interest-only mortgage, each month you only pay the interest outstanding on the mortgage, meaning that the capital sum remains the same throughout the period of the mortgage. You don’t pay off any of the capital until the end of the mortgage term.
This means that you will need to make other arrangements for paying back the capital sum. These mortgages are not as widely available as they once were. Lenders will now only lend money in this way if the borrower can clearly demonstrate how they propose to repay the capital sum at the end of the mortgage term.

Your home may be repossessed if you do not keep up repayments on your mortgage or loans secured on it.