A Fixed-Rate Mortgage is a home loan where the interest rate charged on the loan is fixed for a predetermined period. Typical fixed rate mortgage deals will apply for three or five years. Although offering certainty, these loans can prove expensive if interest rates start to fall.

With a Fixed-Rate Mortgage you are locked into a fixed monthly repayment cost for a predetermined period - typically anything from one to five years. By taking this option you are buying certainty and you know that whatever happens to interest rate your monthly mortgage outgoings will not change.

A Fixed-Rate Mortgage may look an expensive option when interest rates fall. And once you take out such a deal it is difficult to break away from it. Fixed-Rate Mortgage lenders tend to charge hefty redemption penalties if you decide to repay or change your loan before the fixed-rate mortgage period ends. But if payment certainty is crucial to you such disadvantages should not defer you from taking out a fix-rate mortgage.