Fixed rate mortgages

A fixed rate mortgage provides guaranteed monthly payments for a predetermined period of time. Usually this period is for two, three or five years.

If you're the kind of person who likes certainty and the reassurance of knowing exactly what your monthly outgoings will be, then a fixed rate mortgage may be best for you.

A fixed rate mortgage sets the interest rate that you will pay for a specified period, guaranteeing the amount payable each month for a fixed length of time.

Once the fixed time period expires your mortgage repayments switch to the mortgage lender's standard variable rate. This arrangement will enable you to more accurately forecast your budget during the early years of your mortgage term.

In addition, if the interest rate rises above the fixed rate that you are paying, you will actually save money. However, the reverse of this is also true. If the interest rate goes down whilst the fixed rate deal is in place, you will end up paying more.

Best Buys: 2 Year Fixed For Moving Home (New Purchase)

The table below provides a summary of fixed term mortgages with are less than or equal to 2 years suitable which are suitable for buying properties (not remortgages), and with no tie-in period after rate change. The products are sorted with the lowest initial rate payable listed first.

Lender	Product	Rate on which initial payments are based	Calculation applied to Early Redemption Charge	Fees payable on application or completion (based on £150k if %)	Maximum LTV Maximum LTV for remortgage, house purchase or first time buyer
HSBC	2 year 2.24% Fixed LTV 60% Special Direct	2.24	2/1%	1999	60
Santander UK plc	2 year 2.35% Fixed LTV 60% Direct	2.35	3%	1995	60
Market Harborough Building Society	2 year 2.69% Fixed LTV 75% Direct Only	2.69	3%	1595	75
Progressive Building Society	2 year 2.69% Fixed FTB LTV 50%	2.69	3%	495	50
Bank of Ireland (NI)	2 year 2.78% Fixed BBR LTV 65% Direct	2.78	3%	799	65
Britannia	2 year 2.79% Fxd LTV 60% Direct	2.79	2/1%	1499	60
Chelsea Building Society	2 year 2.79% Fixed LTV 70% Direct	2.79	3%	1895	70
Cumberland	2 year 2.79% Fixed H/P LTV 75%	2.79	3%	699	75
Mansfield	2 year 2.79% Fixed LTV 75%	2.79	2%	1499	75
Principality Building Society	2 year 2.79% Fixed LTV 75% Direct	2.79	3%	999	75

Source: Defaqto