Interest only mortgages means that you will only pay the interest portion of your loan for a set period of time. This can be an advantage because the repayments will be significantly lower. This option is often chosen by investors who expect to be able to pay off the loan before the interest only period ends. Most people who take out an interest only loan choose a fixed rate loan so they can accurately budget for the repayments because they will not change.
A fixed rate mortgage is an advantage in many situations, but there are some downsides that need to be considered before signing up for the loan. Fixed rate mortgage repayments are guaranteed to remain the same, but if the interest rates are falling (or will fall) then you will actually be paying much more than if you had taken a flexible rate loan. Of course the opposite is also true. The interest rate on these types of loans will also be set at a higher level than the current rate, which is also something to consider.
As with all financial products it is important to do some research and compare the different lenders before committing to a mortgage. A loans officer or mortgage broker can help you compare the different products, but if you are not too sure about this option then you can use the Internet to complete your research independently and without bias. Fixed rate interest only loans are not for everybody and all situations, but if you know what you are looking for they can be a great option.