The European Central Bank (ECB) governing council meets in Frankfurt next week to discuss EU monetary policy. The conversations that the council likes to indulge in from time to time may not sound like anything that individual homeowners should know or care about, but if, as expected, the council decides to increase its base interest rate, homeowners could find that their budgets are constrained that bit further.

If the ECB follows through on its recent hints and increases the base rate by a quarter of a percentage point to 2.5 per cent, homeowners who are repaying variable rate mortgages will likely see something like €15-€50 added to their monthly repayments - on top of similar increases last December.

People on tracker variable rates will automatically face an increase in the interest they pay, while borrowers on standard variable rates, which are generally higher than tracker rates, will have to wait to see if the ECB rate increase is passed on by their mortgage lender. But there is one group of borrowers that won't be too worried about what the ECB gets up to in Frankfurt: those who signed up to fixed-rate mortgages.

Fixed rates are popular with first-time buyers, because they give them the security of knowing what their repayments will be for a certain period, which might be important if they have stretched their budget to breaking point in order to finance their property purchase.

Low one-year discount fixed rates offered by many lenders to first-time buyers can be better value in the short term. However, these rates often revert to above-average interest rates once the discount period has expired.

Fixed rates can be poor value for money if the base interest rate is significantly lower than the fixed rate over the term.

At times when interest rates are forecast to rise, fixed rates are always priced above variable rates and the longer the term of the fix, the higher the rate. But if the ECB base interest rate does creep up, variable rates could leapfrog the fixed ones, leaving homeowners who opted for fixed rates feeling a little smug.

Playing the fixed-rate game can be dangerous, however, and the longer the fix that borrowers opt for, the riskier their strategy becomes.

For example, the cheapest five-year fixed rate available at the moment is 3.8 per cent from National Irish Bank (NIB).

Given the average tracker variable rate is around 3.35 per cent, it will only take two quarter-point ECB rate increases for the five-year fixed rate to fall below the average tracker rate. The first of these rate increases is pencilled in for next week; a second rate increase is on the cards for later this year, although it is far from certain.

Even if these rate increases occur, there is no guarantee that economic conditions won't trigger a fall in interest rates at some point during the five-year term, leaving someone on the five-year fixed rate with higher on average repayments over the period than someone who has opted for the tracker variable rates all along. There is a recent historical precedent for this among Irish borrowers. Having being stung by double-digit interest rates up until the mid-1990s, many borrowers jumped prematurely at the chance to lock in at rates of 8 or 9 per cent for five years, only to watch interest rates promptly tumble below the 5 per cent mark.

"People aren't looking at a five-year timeframe anymore," says Peter Bastable, managing director of Simply Mortgages.

"They might have fixed for five years a decade ago and rates went down, so they felt like they were being ripped off," he says.

But the difficulty in predicting what will happen to interest rates is exactly why fixed rates appeal to borrowers looking for peace of mind, according to Michael Dowling, president of the Independent Mortgage Advisers' Federation (Imaf).

"People are taking a much shorter term view with interest rates, which is fine if you can absorb the rate increases," says Dowling.

"If you're in a job where the only pay increases you will get are those under the national payment agreement and there's not that many promotional opportunities, then fixed rates make sense," he explains.

On the other hand, borrowers who do have promotional prospects or the capacity to earn bonuses or additional income will be in a better position to cope with a series of rate increases.

Some lenders have already begun to increase their fixed rates: Bank of Ireland, its subsidiary ICS Building Society, EBS and IIB Homeloans have bumped up their rates in recent weeks.

But NIB, which has the cheapest two, three and five-year rates in the market, has yet to make its move.

"People should be strongly considering fixed rates," says Dowling. "We've already seen some movement upwards, but the NIB rates for three and five years are excellent."

The biggest disincentive to fixed rates is perhaps the redemption penalties that borrowers must pay if they exit a fixed-rate contract early, for example if they want to switch lenders, move to a variable rate, remortgage or pay off all or part of their mortgage early. First-time buyers shouldn't generally fix for a longer term than the length of time they are planning to stay in their starter homes.

"There were 80,000 completions last year and many of those people will think, 'I'm getting my foot on the ladder and I want to make sure I'm going to be able to afford my mortgage. I'm going to lock in for three years, because I'm going to be here for three years'," says Bastable.

Homeowners who move house and want to borrow more money within the term of their fixed-rate contract can avoid paying a redemption penalty if they stay with the same lender and split the mortgage, so that the existing loan stays on the original fixed rate and the new borrowings are charged interest on the current rate.

"It does mean having to stay with the same lender, but it's not impossible to avoid the penalties if you want to move house," says Dowling.

Ultimately, while windows of good value do sometimes occur, borrowers who fix at the wrong time or for the wrong term will end up paying the price.