Definition
A home loan whose interest rate, and principal-and-interest payment, stay the same for the whole term, usually 15 or 30 years.
What it means
With a fixed-rate mortgage, the interest rate is locked for the life of the loan, so the principal and interest part of your payment never changes. That makes budgeting easier and protects you if market rates rise. The most common terms are 30 years, which gives lower monthly payments, and 15 years, which has higher payments but a lower rate and much less total interest. Your total monthly housing payment can still change, because property taxes and homeowners insurance paid through an escrow account can rise or fall. If rates fall later, the only way to get the lower rate is usually to refinance, which has closing costs. Fixed-rate loans are available through conventional, FHA, VA and USDA programs.
Example
A $320,000 30-year fixed mortgage at 6.5% has a principal-and-interest payment of about $2,023 that stays the same for all 360 payments, while taxes and insurance may change.
Illustrative numbers only. Your situation will differ.