Which of the following best describes a fixed-rate mortgage?
Correct Answer
B) The interest rate and monthly principal and interest payment remain stable for the life of the loan
A fixed-rate mortgage is characterized by an interest rate that does not change over the life of the loan, resulting in stable, predictable monthly principal and interest payments. This makes budgeting easier for borrowers. Fixed-rate mortgages are commonly available in 15-year and 30-year terms and are widely used by homebuyers in Delaware. Unlike adjustable-rate mortgages (ARMs), the rate is not tied to any market index and will not fluctuate.
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