A fixed interest rate is an interest rate that stays the same for the entire life of the loan, so the rate and the payment do not change over time. As one federal example, the Truth in Lending Act defines a "fixed-rate mortgage" as "a transaction secured by real property or a dwelling that is not an adjustable-rate mortgage or a step-rate mortgage."
A fixed interest rate is set when a loan is originated and remains constant for the full term, so the scheduled payment stays the same from the first installment to the last. This contrasts with a variable or adjustable rate, which can rise or fall as an underlying index changes, causing the payment to change as well. Fixed rates are common on installment loans, many personal loans, and fixed-rate mortgages, where a predictable payment supports budgeting. Because the rate is locked, the total interest over the life of the loan can be projected in advance from the rate, the principal, and the term.