03: Fixed rate mortgages

With a fixed rate mortgage, the interest rate is fixed for a specific period of time. For example, you may be offered a variable rate of 4% or 4.5% fixed for two years. If interest rates stay the same, the variable rate (in this case) will prove cheaper. However, if interest rates rose by 2%, the lender might then charge 6% as a variable rate, while the fixed rate mortgage would continue at 4.5%.Last Updated