What you should know about 5-year fixed rate mortgages

A greater period of repayment security can be gained by opting for a longer term fixed rate. As well as security, with a longer term fixed rate you do not need to search for a new mortgage every couple of years, as you might do with a shorter term fixed mortgage.

Fixed rate mortgages are usually more expensive than adjustable rate mortgages. Due to the inherent interest rate risk, long-term fixed rate loans will tend to be at a higher interest rate than short-term loans. The relationship between interest rates for short and long-term loans is represented by the yield curve, which generally slopes upward (longer terms are more expensive). The opposite circumstance is known as an inverted yield curve and occurs less often.

For the right to claim a redundancy payment, an employee needs to have had two years of continuous uninterrupted service with the same employer.

After the statutory term of one year, employees engaged by the same employer on a series of continuous fixed-term contracts have the right to pursue a claim for unfair dismissal if their contracts are not renewed.

 

  • A fixed rate that remains throughout the tenure of the mortgage is charged
  • The rates are not tied to an index and are not dependent on the market
  • A fixed monthly payment has to be made in a simple and uncomplicated manner with no complications or perils of complex parameters.

For the right to claim a redundancy payment, an employee needs to have had two years of continuous uninterrupted service with the same employer.

After the statutory term of one year, employees engaged by the same employer on a series of continuous fixed-term contracts have the right to pursue a claim for unfair dismissal if their contracts are not renewed.

The Fixed term (Prevention of less favourable treatment) Employees Regulations (2002) protect both those working under standard fixed term contracts with a stated termination date and those on 'specific task' contracts. However, they do not protect agency staff.

A common example of a fixed-term investment is a term deposit, in which the investor deposits his or her funds with a financial institution for a specified period of time and cannot withdraw the funds until the end of the time period, or at least not without facing an early withdrawal penalty. This is the opposite of a demand deposit, in which the investor is free to withdraw his or her funds at any time. As a price for the convenience of withdrawal at any time, demand deposits generally pay lower interest rates than term deposits.

You will need to make the same tax arrangements for fixed-term employees that you would for permanent employees.

Fixed-term contracts give you the advantage of bringing in specific skills and labour as and when they are needed.

It's important to remember that unless there are special circumstances that can be justified, you must treat fixed-term employees the same as comparable permanent employees. This means you must give them:

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