It’s a sound option when interest rates are on the rise or in time of economic uncertainty. Should interest rates plummet, however, you’ll still have to pay off your mortgage at the fixed rate until the end of the agreed period.
Also, while you can break a fixed-rate loan – i.e. refinance a mortgage with another lender – it can come at a cost. Refer to your loan agreement or broker for advice.
Fixed rate mortgages provide certainty. You have a fixed repayment amount for a fixed term of between 1 and 5 years. Relative to floating you will pay more for a fixed rate when rates are expected to go up, and pay less when rates are expected to fall. If you repay a fixed rate early (i.e. sell the house) then you need to be aware of early repayment fees.