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Bankrate's Greg McBride explains the difference to this frequently asked question.

What’s the difference between a fixed and adjustable rate?

When you go through the mortgage process, you’ll be faced with the choice between a fixed and adjustable rate. While the difference between them is straightforward, determining which option is best for you requires some thought.

First, let’s break down the difference. A fixed-rate mortgage has the same interest rate for the life of the loan, meaning your monthly payment of principal and interest won’t change. An adjustable rate mortgage, or ARM, has a variable interest rate, meaning your monthly payments could go up or down over time as interest rates change.

The loan that’s best for you largely depends on the number of years you plan on staying in the home.

For example, if you’re only going to live in the home for a few years, a lower-rate ARM might make more sense since you enjoy lower monthly payments for a period of years before the interest rate begins to adjust. As long as your timetable pans out, you get the benefit of a fixed rate without the risk of facing future rate adjustments. If you plan on being in the home for more than seven to ten years, go with the certainty of a fixed-rate mortgage, and sleep soundly knowing your monthly payment is set in stone.

There are pros and cons to each option, but when in doubt, don’t gamble. Just go with a fixed rate mortgage.