Mortgage rates are the lowest in the history and will not be any lower then what it is now. In fact banks began to raise the mortgage rates and will continue to raise it in the new year. Locking your mortgage for a fixed rate will insure you with a fixed monthly payment for the next few years. I believe that 5 years fixed mortgage is the way to go in 2011.

When you say better, what do you mean ? In terms of monthly payments it is lower. It also depends on what you plan to do in the future - sell the house after 3 years, keep the house, pre-pay as fast as you can, etc. The 2 types of mortgages have their own positives and negatives.