Fixed rate
A fixed-rate loan keeps the same interest rate for its whole term, or for an agreed period: the monthly payment does not change.
It is the predictable option: from the signing, the borrower knows the total cost of the loan, whatever happens to market rates. In return, the starting rate is often slightly higher than for a variable-rate loan.
In Luxembourg, many borrowers combine both: part of the loan at a fixed rate for security, part at a variable rate to benefit from any fall.