What are "fixed-rate mortgages" characterized by?

Fixed-rate mortgages are characterized by having an interest rate that remains constant throughout the entirety of the loan term. This means that borrowers can rely on their monthly payment being stable and predictable, which makes budgeting easier over the lifespan of the mortgage.

This type of mortgage is appealing to many homebuyers because it provides protection against interest rate fluctuations that might occur in the broader market. Rather than facing the uncertainty of potentially rising rates, borrowers can lock in their rate, giving them financial certainty for the duration of their mortgage agreement, which could span 15, 20, or even 30 years.

In contrast, variable interest rate loans are tied to specific financial indexes and can change, causing monthly payments to fluctuate. Loans with decreasing interest rates may eventually lead to different payment schedules or outcomes for the borrower, while mortgages that can only be refinanced are not directly related to the characteristics of fixed-rate loans. Thus, the defining characteristic of fixed-rate mortgages is their consistent interest rate and predictability over the life of the loan.