Fixed Rate Mortgages
The monthly interest rate will stay the same for a set period of time, for example, between 2-5 years. At the end of the fixed rate period your rate will usually change to the Variable rate.
Pros
You are guaranteed that your rate will be exactly the same every month for the duration of the fixed rate term – even if other interest rates rise during this period. You can confidently plan your budget for the whole period, because you’ll know in advance exactly what your major outgoings will be
Cons
If other interest rates fall during the set period, then the amount you pay during the fixed rate term may be higher than if you had chosen a mortgage type where the interest rate is allowed to rise and fall.