The amount of interest payable and thus the monthly payments made are fixed for a specified period of time. This is particularly useful if the borrower has a maximum budgeted payment to keep to or is worried that interest rates were going to increase.
During the fixed rate period, regardless of what happens to interest rates, the monthly payments will remain constant even if the variable rate was much higher than the fixed rate that had been chosen. Generally speaking, fixed rates are usually higher than discounted schemes because you are ‘buying’ the piece of mind and security that the payments will not change.
When choosing a fixed rate the borrower is gambling over what will happen to interest rates - If interest rates rise then the ‘gamble’ has paid off however if interest rates fall then you may be locked into a high fixed rate and ‘lose out’ as many people did in the late nineties.