New Hampshire State Real Estate Practice Exam 2025 - Free Real Estate License Practice Questions and Study Guide

A fixed-rate mortgage is designed to provide stability for borrowers by guaranteeing a consistent interest rate throughout the life of the loan. This ensures that the monthly payments remain predictable and unchanged, regardless of fluctuations in the overall market interest rates. Borrowers can effectively budget their finances since they can rely on the same monthly mortgage payment for the duration of the loan, typically ranging from 15 to 30 years. This predictability is particularly advantageous for those who prefer to know their costs upfront and avoid the uncertainty associated with variable interest rates.

The other options present concepts that do not accurately describe the nature of a fixed-rate mortgage. For example, the fixed-rate mortgage is distinct in that the interest rate does not change periodically, opposing option A. Option C suggests that fixed-rate mortgages are always higher than other mortgage types, which is not a calculated fact as rates can vary depending on many factors. Lastly, option D incorrectly limits the use of fixed-rate mortgages to only investment properties; in fact, they are widely available for primary residences as well as investment properties.