… increasing interest rates?
Any increase of interest rates on the market will lead to a drop in prices of already issued bonds with fixed coupons. If current interest rates are higher than the ones at the time that the bond was issued, under otherwise identical conditions, the bond will be sold for a price that is lower than its nominal value. But since coupon amounts are modified regularly, price fluctuations of mortgage bonds with a variable coupon will be smaller and shorter than with mortgage bonds with fixed yields.
… stable interest rates?
Under otherwise identical conditions, stable interest rates will not affect the bond price.
… decreasing interest rates?
Any decrease of interest rates on the market will lead to an increase of prices of already issued bonds with fixed coupons. If current interest rates are lower than the ones at the time that the bond was issued, under otherwise identical conditions, the bond will be sold for a higher price than its nominal value. But since coupon amounts are modified regularly, price fluctuations of mortgage bonds with a variable coupon will be smaller and shorter than with mortgage bonds with fixed yields.