In a fixed-rate mortgage arrangement, the interest rate is fixed for a predetermined period of time. The monthly mortgage payment will not change, no matter whether the Bank of England, or the mortgage provider, raises or reduces their interest rates. For the borrower, the advantage of a fixed-rate deal is that they know exactly how much their monthly repayment is going to be each month and for how long.

In some instances, the interest rate charged on a fixed-rate mortgage can be higher than those charged for other types of mortgages. The borrower may also have to pay an arrangement fee to set up a fixed-rate deal.

Usually, once a fixed-rate arrangement comes to an end, the lender’s standard variable rate applies.