The interest rate is fixed so that monthly repayments are guaranteed to stay the same for an initial period eg 2, 3 or 5 years. During this time the mortgage repayment will be protected from the risk of interest rate rises giving peace of mind of knowing exactly what what repayments are payable each month. However, there will be no benefit benefit if interest rates fall. At the end of the fixed rate period the interest rate will revert to the Society’s underlying variable rate
Initial fixed rate for 3 years
then changing to....
The Society’s Mortgage Variable Rate
for the remaining term of the mortgage
The overall cost for comparison is
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A mortgage of £180,000 payable over 25 years initially on a discounted rate for 3 years at 2.43% and then on our Mortgage Variable Rate (MVR) of 5.79% (variable) for the remaining 22 years would require 36 monthly payments of £806.33 and 264 monthly payments of £1,105.79.
The total amount payable would be £321,504.44 made up of the loan amount plus interest (£319,739.44) an Application fee of £1250, a CHAPS Fee of £20.00, a Valuation fee of £270.00, a Legal fee of £105.00 and a Mortgage Discharge Fee of £120.00.
The overall cost for comparison is 5.1% APRC representative.
Please note the example above is for a house purchase on a repayment basis.