Fixed Rate

What is a Fixed Rate?

A Fixed Interest Rate is form of finance product where the interest on the loan will not change for a specified period. In terms of personal loans, the rate will usually remain for the entirety of the loan, but for some products this may just be offered as an introductory offer.

In many cases you may be offered a fixed interest rate loan on purchases that are paid off in a reasonably short time (5 years or fewer) such as car finance or a personal loan. There are also plenty of Fixed Rate Mortgages available, but these are usually offered as introductory offers, and change to Standard Variable Rate mortgages after a specified period.

You can also find fixed-rate savings accounts, which offer a set amount of interest provided you make a regular monthly investment. These typically run between 1-5 years and your savings may not be accessible during this period.


Q: What if the base rate goes down?

A: Your repayments still won’t change; fixed interest rates are a two way street, you won’t pay more than the first month but you won’t pay less either.

Jargon Buster

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