Fixed and variable rates
The type of rate you choose affects how predictable your repayments are and how they respond to market changes.
Fixed-rate periods
Your rate stays the same for an agreed period, often one to five years. Repayments are predictable, but you may pay a fee to settle or switch during the fixed period.
Variable rates
Variable rates usually follow a benchmark such as EIBOR plus a margin set by the bank. Repayments can rise or fall as the benchmark moves.
What happens after a fixed period
Many fixed products move to a variable rate when the fixed period ends. Check the reversion terms, as this is often the point at which refinancing is worth reviewing.
Choosing between them
Consider how much payment certainty you need, how long you plan to keep the property and what flexibility you may want to overpay or settle early.
