5
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Home Ownership — Quiz

Question 5 • Financial Algebra/Mathematics

What happens to the interest rate on a fixed-rate mortgage?

Answer
A
It is higher at the beginning and decreases over time.
B
It is lower at the beginning and increases after a set period.
C
It remains the same throughout the term of the loan.
D
It can change over time based on market conditions.

Explanation

A fixed-rate mortgage keeps the same interest rate for the entire loan term. This means the rate does not rise or fall as market conditions change. Choice A, “It remains the same throughout the term of the loan,” is correct; a rate that can change over time is characteristic of an adjustable-rate mortgage.

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