Interest rates in the financial markets are subject to constant fluctuation. As a result, your monthly payments vary. You need to ask yourself how long-term you want or need to plan for the costs of the real estate, depending on your financial circumstances.
With adjustable rate mortgages the interest rate can change any time. If rates drop, you benefit from lower costs, but if rates go up your expenses increase. You need to have a degree of financial flexibility to handle additional costs.
A LIBOR mortgage is based on the Libor interbank offered interest rate.
The interest rates are adjusted every three months or every six months. With these products, your monthly payment can increase or decrease. But you profit from interest rates that can be significantly lower than long-term interest rates.
With fixed-rate mortgages you avoid this risk. The interest rate is fixed for a term from 2 to 10 years, and you know exactly what your costs will be. This type of mortgage provides security and planning ability, but you would not benefit if interest rates go down.