If you're considering taking out a mortgage, especially a 30 year fixed mortgage, rates are critical. The current 30 year fixed mortgage rate is reflecting the concerns of the banks and lending institutions following the sub-prime lending bubble bursting.

If you are looking for a mortgage on a new home, or a mortgage on a second home or just to refinance a home mortgage, fixed interest rates will give you security that your payments will not go up over time.

Unfortunately current concerns over mortgages means that mortgage deals are harder to find and not as good as they were. Many of the current 30 year fixed rate mortgages are not going to seem a good deal in a few years time

Over the next year or two we will see the banks being more careful and cautious than they have been over the last few years. Despite the fact that interest rates are unlikely to rise much and may well fall over the coming year, getting tied in to a 30 year period may not be the best course of action

When I say compare fixed mortgage rates, I don't mean just compare 30 year fixed rates, take a look at 15 year rates or even a 10 year fixed mortgage rate. It may well be better to take a mortgage where the rate is fixed for a shorter term.

At the end of the term you may end up paying a higher rate for a mortgage or a lower. Some financial experts think you could be paying much lower rates in just 5 years time.

Borrowing on a variable rate, often tied to the central bank's lending rate can be a risk. If rates go up you pay more but if they fall you pay less. The critical thing to consider when comparing fixed rate mortgages and variable rate mortgages is 'can you afford to pay more if the interest rates rise?'

If you can answer 'yes' to that question then it is worth talking to your bank about a variable mortgage. You are taking the risk of market movement and should get a lower rate for that.

If you could not cope with a higher rate then you must go for a fixed rate mortgage to avoid putting your house at risk. Bankruptcy is not something you want to suffer.