In general when applying for a mortgage a broker will offer two options, a discount rate or a fixed rate.

Essentially a discount rate mortgage gives you a limited-time reduction on the basic, variable rate that they offer, so for example you may be paying 4.5% interest rather than 5.5% while the offer lasts. However should the national interest rates change, or the bank adjust their variable interest rate for commercial reasons, you could end up paying more on your monthly repayments than you'd intended.

With a fixed rate mortgage, where the interest rate you pay is guaranteed for an agreed number of years, you will always pay the same amount on your repayments, and need not worry about fluctuations in the economy or credit markets as they will not affect your fixed rate.

Essentially a fixed rate mortgage offers security at a slight premium over a discount rate. While a discount rate may work out cheaper it is also a gamble - if the market does not work out in your favour your repayments could increase, and if you can only just afford them when you get your mortgage this could affect your finances. With a fixed rate mortgage you have the security of knowing your repayments will remain the same, simplifying your finances and avoiding shocks from the market.