What is a key feature of a fixed-rate mortgage?

A key feature of a fixed-rate mortgage is that the interest rate remains constant throughout the loan term. This stability is advantageous for borrowers because it allows them to predict their monthly payments over the entire duration of the loan, typically ranging from 15 to 30 years. Knowing that their principal and interest payment will not change helps borrowers budget effectively and provides peace of mind, especially in a fluctuating interest rate environment.

In contrast, an adjustable-rate mortgage features interest rates that can fluctuate based on market conditions, which can lead to varying monthly payments. The flexibility regarding the loan term suggested in one of the options is not typical with fixed-rate mortgages; instead, fixed-rate loans have set terms that are agreed upon at the outset. Lastly, while some loan products may require payments only for a specific period, this is not a characteristic of fixed-rate mortgages, as they typically involve a consistent repayment plan over the full term of the loan.