| This scheme gives the customer a guarantee that
for a given period of time the applied mortgage interest rate will
be fixed and will be unaffected by either rises or falls in underlying
interest rates.
A benefit of this scheme is that customers will be certain of the
amounts of their repayments for the period of time that the fixed
rate is in force. There can be no variation of this.
This type of scheme may attract an initial fee to the lender to
set up the scheme.
In addition, depending on the type of fixed rate arranged, there
may be redemption penalties on the loan if it is redeemed within
a certain period of time.
When the fixed rate expires the interest rate will revert to the
lenders variable rate.
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