Fixed interest rate loan
A fixed loan offers a fixed interest rate for a specific period (eg. six months to five years).
At the end of the fixed rate period, the loan is renegotiated for a further fixed term or reverts to the variable interest rate current at that time.
It may not be possible to pay extra amounts off the principal without paying a penalty.
A penalty usually applies if the borrower wishes to refinance the loan during the fixed interest rate period.