Function

• A fixed rate mortgage sets the interest rate at the time the loan originates, and the rate does not change. The interest rate depends on market conditions at the time of the loan and the borrower's creditworthiness.
  
  

Time Frame

• According to Bankrate, most fixed rate mortgages have terms of either 15 years or 30 years. The shorter the term, the less interest will be paid over the life of the loan. However, the monthly payments will be higher.
  
  

Benefit

• Fixed rate mortgages offer the security of knowing exactly what your monthly payment will be over the term of the mortgage regardless of how interest rates change in the future.