The first question that most people ask when considering a new mortgage is 'What type of interest rate structure is best for me? - Should I take a fixed rate, a capped rate, a discounted rate, a stepped rate, a standard variable rate or a cash back deal?' Indeed this all important question is one that needs very careful consideration. So let's look at fixed rate mortgage, how it works, its advantages and disadvantages.

If you plan on owning your property for a long time or want your mortgage repayments to remain quite static then a fixed rate especially for bad credit mortgage could be the mortgage solution you are looking for. With this type of mortgage, you can avoid the uncertainty of possible changes to your monthly payment by fixing the interest rate for a set period of time. This will be agreed at the start of the mortgage.

The fixed-rate mortgage you choose will depend on:

• the size of your loan, and its relation to the value of your home,

• the length of time you’d like to fix your rate for.

The actual fixed interest rate and period over which it will apply will depend on the terms of the deal you have chosen.

Fixed rate mortgages are the most classic form of loan for home and product purchasing in the United States. The most common terms are 15-year and 30-year mortgages. Outside the United States, fixed-rate mortgages and bad credit mortgages with fixed rates are less popular, and in some countries, true fixed-rate mortgages are not available except for shorter-term loans. For example, in Canada the longest term for which a mortgage rate can be fixed is typically no more than ten years, while mortgage maturities are commonly 25 years.

Fixed rate mortgages can be good for first time buyers and anyone on a budget who needs the stability of a set monthly repayment. With a variable rate mortgage are risky for bad credit mortgage as your payments may go up and down according to the interest rate changes. However with a fixed rate mortgage you have the security of knowing the exact amount you will repay each month, despite any changes in interest rates.

Some of the advantages of a fixed rate mortgage include:

• Straightforward budgeting because you usually pay a fixed amount each month

• Save money by keeping your existing interest rate even if the Central Bank base rate rises

• A choice of different repayment periods - rates can be fixed for anything from 2 years to the entire life of the mortgage

However Fixed Rate Mortgage has Disadvantages too.

With a fixed rate mortgage, you typically have a higher monthly payment than you might have with some of the other mortgage and bad credit mortgage choices. That is because the fixed rate mortgage offers you the safety of knowing that your payments will not increase. Because lenders don't know what will happen with interest rates over the next 15 to 30 years, they charge you for this luxury.

Should You Have a Fixed Rate Mortgage?

You should discuss your particular situation with a talented and helpful lender. Generally, you'll find that fixed rate mortgages are the right choice if:

• You think interest rates are low

• You can afford the payment for the house you want

• You need to budget for and predict monthly payments

• You will keep your home for a relatively long period of time

Fixed rate mortgages can have a variety of fees built into the final payment that you are quoted. Ask for a written, itemized explanation of what fees you are paying -- and why. It never hurts to ask if the lender will waive a fee or two. If you are a good borrower or if you're making a large purchase, your chances are better.