Loan programs
Fixed-rate mortgage
A loan whose interest rate does not change for its whole term
The payment of principal and interest is level for the life of the loan, so the borrower carries no interest rate risk. Taxes and insurance in an escrow account can still change the total monthly payment.
How the exam asks about it
The distinction that matters is between the principal and interest payment, which is fixed, and the PITI payment, which is not.
Related terms
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