Fixed mortgage rates are the safest of all terms in a first or second mortgage, though they are rarely the lowest at the beginning.
A fixed mortgage rate loan might cost you an extra half interest point at the time of origination, but you know exactly what you will be paying a year or five years or twenty years down the road.
Unlike an ARM (Adjustable Rate Mortgage), fixed mortgages stay the same regardless of economic conditions. This kind of loan means that if you are on a fixed income, you can plan your expenses from year to year with a bit more certainty. However, fixed mortgage rates are always initially quoted a bit higher than the lower ARM, simply because the bank is taking more risk. If the interest rate at which they are charged goes up, they cannot pass this along to fixed mortgage holders.
Aside from having to pay a bit more for a fixed mortgage, the downside to it is that if rates go down, your payment does not follow. In order to get a lower rate, you must either refinance or renegotiate the loan.
