Fixed Interest Rate

A fixed interest rate means that the percentage charged on borrowed money stays the same for a set term.

What is a fixed interest rate?

A fixed interest rate means that the percentage charged on borrowed money stays the same for a set term. This means that the borrower knows exactly how much they will pay in interest each month, making it easier to budget and plan for payments.

How is a fixed interest rate different from a variable interest rate? 

A fixed interest rate stays the same for the entire duration of a loan, meaning your monthly payments remain consistent. 

On the other hand, a variable interest rate can change over time based on fluctuations in the market, meaning your monthly payments can go up or down. With a fixed rate, you get stability and predictability, while a variable rate offers the potential for lower payments but comes with the risk of increases in the future.

Can you get out of a fixed rate mortgage? 

Yes, it's possible to get out of a fixed-rate mortgage, but it typically involves some form of penalty or fee, known as a break fee or early repayment charge. These charges compensate the lender for the interest income they would lose if you pay off the loan early or switch to a different type of mortgage. 

The specific terms and conditions regarding early repayment or refinancing will vary depending on your lender and the terms of your mortgage agreement.

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