Finance
A Montana homebuyer who obtains a fixed-rate mortgage at today's rates and then rates rise significantly will:
ABe required to refinance to the higher rate
BContinue paying the original lower rate for the life of the loan✓ Correct
CHave their payment increase on the annual anniversary date
DBe charged a prepayment penalty for keeping the lower rate
Explanation
A fixed-rate mortgage locks in the interest rate for the entire loan term regardless of market changes. Montana homebuyers with fixed-rate mortgages benefit from rate increases because their payment stays the same while rates rise. Rising rates make their existing fixed rate increasingly valuable.
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