Which of the following best describes the type of mortgage discussed?

A fixed-rate mortgage is characterized by having a constant interest rate that remains unchanged throughout the life of the loan. This provides borrowers with predictability in their monthly payments, making it easier to budget over time. Such mortgages are particularly appealing during periods of low interest rates, as borrowers can lock in a favorable rate for the duration of the loan, typically 15 to 30 years.

This stability allows homeowners to plan their finances without the concern of fluctuating interest rates, which can lead to variations in monthly payment amounts. It is a straightforward mortgage type that is widely understood and often preferred by first-time homebuyers or those seeking long-term residences.

In contrast, adjustable-rate mortgages can change interest rates based on market conditions, leading to varying monthly payments. Interest-only mortgages allow borrowers to pay solely the interest for a specific period, which can lead to a larger outstanding balance later. Negative amortization mortgages can result in increasing loan balances over time if payments do not cover the interest, leading to potential financial difficulties. Each of these alternatives introduces a level of uncertainty or risk that a fixed-rate mortgage effectively mitigates.