A fixed rate mortgage is a loan in which the bank/lender offers an interest rate that will be unchanging over the period of the loan. There are two ways you can have a fixed rate mortgage in the UK. The first type of fixed rate mortgage available is over a standard mortgage term. The interest rate may seem high but of course this has to be weighed against the possible movements in interest rates and inflation over the period. There is also the great advantage of knowing exactly what you will be paying each month.
The second type of fixed rate mortgage is when the fixed rate is a timed portion of an adjustable rate mortgage. In this example you would have a mortgage for say ten years; of those ten years two years would be at a fixed rate, and after that period the interest rate would be the normal variable rate charged by the institution.
An online mortgage calculator will help you determine the amount of loan you can manage to finance. When you use a mortgage calculator you can enter in the current interest rate and the amount of the loan you need. The calculator will then show you the monthly payment amount you would pay based on the loan terms. You would also need to enter into the calculator the amount of time you would have the loan as well as any down payment.
By using the mortgage calculator you can quickly discover the maximum payment you could afford to repay and therefore the maximum amount of money you could sensibly afford to borrow.
