Given that the fixed rate is higher, when the interest rate drops do those people pay off there mortgage quicker as they are paying more each month?Does the decreasing interest rate mean that those on fixed mortgages will pay them off quicker?
Not necessarily, the mortgage term remains the same, just the repayments have changed.Does the decreasing interest rate mean that those on fixed mortgages will pay them off quicker?
On the contrary. A fixed rate means just that. It won't fluctuate whatever happens to the interest rate. When you take out a mortgage you have to decide on the type you want and, quite frankly, it's a bit of a gamble. So if you have a fixed rate mortgage, you'll be losing out at the moment. If on the other hand, interest rates go up your mortgage rate will remain unaffected so in such a case you'd be quids in!
If they are on a fixed rate, they pay the same whether interest rates generally go up or down. People on a variable rate should in theory pay less. However, there comes a point when lenders can't afford to charge any less - they need to pay the wages bill.
No not at all because the extra they are paying is just interest. They are not paying any extra towards the actual mortgage
no not unless they send more than required by contract every month. The stated rate is their pay back amount every month and does not change with the market that is why it is called FIXED
Nope. Your rate is ';fixed';. If you have an adjustable it MAY go down, but don't count on it, there are too m any variables.
No. Fixed rate means exactly that - fixed.
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