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With a fixed interest rate, your monthly repayment is fixed for the
period you choose, or agree with your bank.
When you choose a fixed rate, you benefit from knowing exactly how
much your monthly mortgage repayment will be during the fixed period.
The disadvantages can be that you will not benefit from any reductions which may apply to variable rates during the fixed period.
With a variable rate, your monthly repayments may rise or fall from time to time. If the variable rates fall your monthly repayment reduces, while if variable rates rise, your monthly repayment increases.
Variable rates are periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.
When you have a variable rate, you benefit from lower monthly repayments as a result of any reductions which may apply to variable rates.
The disadvantage can be that your rate and monthly repayments may increase.
You may choose to set a part of your mortgage at a fixed rate and the remainder at a variable rate. If variable interest rates are reduced, your repayments on that part of your mortgage will reduce, while if variable rates rise you have the security of knowing that only the payment on the variable portion of the loan will increase.