A mortgage that has a fixed interest rate for the entire term of the loan. The distinguishing factor of a fixed-rate mortgage is that the interest rate over every time period of the mortgage is known at the time the mortgage is originated. The benefit of a fixed-rate mortgage is that the homeowner will not have to contend with varying loan payment amounts that fluctuate with interest rate movements.
With fixed rate mortgages the interest rate is fixed at a certain percentage for a specified period of time or with some lenders for the life of the loan. Fixed rate mortgages are useful when it comes to budgeting as you know what the repayments will be every month. They also protect the borrower from interest rate fluctuations and potentially higher repayments.