These loans are set at a fixed rate for a specified period - usually one to five years. The advantage of allowing you to organise your finances and repayments without the risk of rising interest rates is offset by the disadvantage of not benefiting from a drop in rates. At the end of the term you can lock in another fixed rate, switch to variable or go for a split loan. However these loans may have limited features and lack the flexibility of variable loans. There may be early exit fees and limited ability to make extra payments.