A fixed rate mortgage guarantees a specific interest rate over a period of time. Many people choose fixed rate mortgages and the most popular plans are 3, 4 and 5 years. However, if you wish you can have a fixed rate mortgage for as long as 10 years or as short a period as 6 months.
The part most people like about fixed rate mortgages is the fact that they get a guaranteed repayment amount. However, with long term fixed rate mortgage you will end up paying more for as interest than with a short term fixed rate mortgage. The best time to go for a fixed rate mortgage is when the interest rate is steadily climbing. The reason for this is that if you are signing up for a fixed rate mortgage the interest rate you will lock in will be slightly higher than the current interest rate or the rates offered in variable mortgage plans. Therefore your greatest benefit will be if the interest rates are climbing. Many mortgage brokers also offer incentives such as cash backs. However, make sure that you have analyzed and forecasted the fluctuations in interest rates before you sign up for a fixed rate mortgage. Although these incentives may be tempting, chances are that you will not be making a very big saving over the entire period of your mortgage.