You can typically fix your mortgage rate, and therefore your monthly repayments, for two, three, five, 10 or even 25 years.
You may pay a higher rate the longer the fixed rate period lasts.
Fixed rates are popular with first-time buyers or those on a budget because they offer security. But you could miss out if interest rates come down.
Make sure that you consider the overall cost of the loan, not just the headline rate. Arrangement fees could negate the benefits of a lower rate. Some lenders, charge interest annually instead of daily, which could also end up costing you more.
If you don't switch mortgages once the fixed-rate period ends, you will automatically be put on to the lenders' standard variable rate (SVR).

Article date: July 2006