Fixed rate mortgages allow you to agree a set interest rate over a limited period and the percentage you pay will stay the same despite rises or falls in the interest rate during that time. The longer the period of the agreement, the higher the fixed interest rate so you have to weigh up the risks of being locked into a rate that might exceed the variable rate over time with the benefits of the opposite scenario.
However, fixed-rate mortgages can make budgeting easier especially for first-time buyers. While you are within a fixed-rate period, however, you could be liable to penalty fees should you want to pay off your mortgage early, for example if you wanted to switch lenders or mortgages for more beneficial terms (this is known as an early redemption penalty).
After the fixed rate period has ended the mortgage is usually converted to a variable rate. Some fixed rate mortgages will lock you into the variable rate for a certain time whereby you will incur penalties for early settlement (overhanging redemption penalty). When this period has finished you can choose another fixed rate or other option.