A fixed interest rate is a loan rate that remains the same throughout the loan term, creating consistent monthly payments. This predictability makes it easier for borrowers to budget, as they aren’t affected by market rate fluctuations. Fixed rates are common in long-term loans, such as mortgages, offering peace of mind by eliminating surprise rate increases. While fixed rates can be initially higher than variable rates, the stable costs can benefit borrowers prioritizing steady expenses over possible savings with changing rates.