Fixed Rate
If you have a fixed rate mortgage, your interest rate and therefore your monthly mortgage payments will stay the same, no matter what happens to prevailing mortgage interest rates.
A fixed rate therefore gives certainty of mortgage costs, which many people find attractive.
The rate would be fixed for a set period or until a set date. When the fixed rate ends, the ongoing long-term rate usually reverts to the lender's standard variable rate.
If prevailing interest rates rise during the period of the fixed rate, the borrowers will benefit by paying a comparatively low rate.
If, on the other hand, prevailing interest rates fall during a fixed rate, the borrowers would end up paying a relatively high rate until the fixed rate ends.
