Finance
What is the primary difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM)?
AFixed-rate mortgages have higher initial rates than ARMs
BFixed-rate mortgages maintain the same interest rate for the life of the loan; ARMs change periodically✓ Correct
CARMs have shorter terms than fixed-rate mortgages
DFixed-rate mortgages are only available from banks
Explanation
A fixed-rate mortgage has the same interest rate for the entire loan term. An adjustable-rate mortgage has an initial fixed period followed by periodic rate adjustments based on an index.
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