A fixed rate is an interest rate on a liability, such as a loan or mortgage, that remains fixed either for the entire term of the loan or for part of its term. A fixed interest rate may be attractive to a borrower who feels that the interest rate might rise over the term of the loan, which would increase his or her interest expense.
A fixed interest rate, therefore, avoids the interest rate risk that comes with a floating or variable interest rate. Most borrowers are more likely to opt for fixed interest rates during periods of low interest rates.
Here at Jordan Pacific Mortgage we highly suggest and recommend to our clients that they secure a fixed interest rate over a specific term. The pros and cons will and can be discussed during the initial conversation.