The best 5 year fixed mortgage rates will be competitive with many other lenders and should have low associated costs. The Annual Percentage Rate (APR) will vary depending on your personal circumstances and the current exchange rate between the UK and the US dollar. The best loan rates will generally have a low interest rate, low or no fees, and will enable you to borrow at very high levels of the property’s price. The level of deposit that a lender will require in relation to the total value of the loan is called the Loan to Value ratio (LTV).
The five-year fixed rate mortgage is sometimes referred to as the long term fixed mortgage or an ultra-risky option. This type of loan offers a lower initial payment than other types of loans, however there are some risks associated with this option. Lenders who offer this option are likely to charge higher interest rates than competitors. You may also find it difficult to get a refinance or change the repayment terms in the event of an emergency.
For the best five-year fixed rate mortgages consider those offered by financial institutions such as the large banks, building societies and the main mortgage providers in the UK. These providers offer a variety of fixed interest options, which can be tailored to suit individual needs. Some lenders allow a borrower to choose a longer repayment period, while others limit the amount they will lend for a given term. In addition, some lenders allow the borrower to reduce the term of the mortgage by paying extra towards the cost of living. Borrowers need to be aware that a further increase in monthly payments could lead to a reduction of equity.
The five years fixed rate mortgage is often referred to a standard variable rate (SVR). A typical SVR involves the borrowing of a lump sum by the lender and then paying a variable rate of interest over this period. The advantage of a standard variable rate is that it provides a base interest rate which should rise gradually over the five years, although this is less likely to occur than in a variable rate mortgage.
The amount that you will borrow against your mortgage can either be a lump sum or weekly or semi-weekly payments. If you choose a lump sum then your repayments will be based on a pre-decided schedule. On the other hand, weekly or semi-weekly payments will be based on a set budget. The size of your lump sum will depend upon your income and the amount you wish to borrow against your mortgage. It is important that you think carefully about the implications of choosing a particular monthly repayment option. As with all types of mortgage products, there are both advantages and disadvantages to each type.
One of the key features of the five years fixed mortgages is the certainty of repayment. These mortgages lock in at the agreed rate, for the entire specified period. This offers the borrower certainty over their monthly outgoings. A key feature that comes into play at the end of the term is that these mortgages offer tax benefits, with many options available to the homeowner. This can often reduce the overall cost of borrowing.
While they do come with greater security and stability than some forms of mortgage product, five year fixed mortgages do come with one key disadvantage. Although they offer longer repayment periods than some types of product, at the end of the loan term, the borrower stands to lose some equity. The key to ensuring that you get the best deal on your mortgage is to do your homework and compare several lenders.
The majority of people will take advantage of the best mortgage deals available at the time of taking up a loan. However, there are always individuals who need to borrow more money and are unable to do so at that time. Five years fixed rate mortgages offer flexibility where larger sums of money are needed at short intervals, but they do have higher repayments over a shorter period of time. Whichever option you choose, it’s essential that you do your research properly, comparing the different products and the costs involved.