number of months repayments. These guarantees, usually only applicable where the fixed term is relatively short, are effectively a derivative instrument whose one-way benefit is granted to the borrower. Some fixed interest loans - particularly mortgages intended for the use of people with previous adverse credit - have an 'extended overhang', that is to say that once the initial fixed rate period is over, the person taking out the loan is tied into it for a further extended period at a higher interest rate before they are able to redeem it. In the UK, Nationwide Commercial recently issued a 30-year fixed rate mortgage as bridging finance. References Interest rates Financial economics Loans