Return to the Mortgage Glossary Home to view explanations for all mortgage terms. What follows is the definition for the term Fixed Rate Mortgages as it relates to mortgages in the UK. Fixed Rate MortgagesFixed Rate Mortgages offer borrowers a guarantee of what their mortgage payments will be for a set period of time. An interest rate which does not vary with rates generally is convenient for budgeting. You, of course run the risk that mortgage rates generally will fall below the level at which you've agreed on your fixed rate deal. But equally, you'll be insulated from any significant upward swing in mortgage rates. These deals have been popular in the UK in the early 1990's after consumers experienced very high home loan rates in the preceding three years. Fixed rate deals often involve the borrower agreeing to a penalty charge - often up to six months interest - if they decide to cash in the mortgage early. In the UK most fixed mortgage rates are fixed for a period of 1 - 10 years.
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