Some people believe that they should lock in long term rates now because we are at a historical low in terms of interest rates, and these rates have no where to go but up.
I personally believe that locking in an interest rate is NEVER to your advantage, and all my mortgages are variable closed term type (i.e. the lowest rates possible). The reason I believe this is the following:

The reason that institutions offer their lowest rates on these types of loans is because this type of loan has absolutely no interest rate risk for them (i.e. the risk that rates will rise beyond the fixed rate they are giving you with a locked-in type loan). No matter how high rates go, the bank always makes their “cut” on the difference between the rate they (the bank) borrows at, and the rate you pay the bank at.

When people take a locked-in loan rate, they gain the advantage of cost certainty but they are paying a hefty premium for that certainty.

I believe that lending institutions offer rates based on what the top interest rate analysts in the country are telling them. Some people seem to think that they can “beat” the banks by locking in a rate, and then if rates go up they will pay less than they otherwise would have paid. I say “if you think you are smarter than the best interest rate analysts in the country, I would say you shouldn’t be buying real estate; you should be working on Bay Street.