What is the main characteristic of a fixed-rate mortgage?

A fixed-rate mortgage is characterized primarily by having a constant interest rate throughout the life of the loan. This means that the monthly payments remain the same, providing borrowers with predictability in their budgeting and finances. Unlike variable-rate loans, where interest can fluctuate over time, the fixed-rate structure protects the borrower from interest rate increases that may occur in the market.

The stability offered by a fixed-rate mortgage can be particularly advantageous for long-term homeowners, as it allows them to lock in an interest rate for the entire term of the mortgage, whether that be 15, 20, or 30 years. This predictability can help borrowers plan their finances more effectively and avoid potential payment shock from sudden interest rate hikes in the future.

Other options do not correctly define the primary feature of a fixed-rate mortgage. Variable interest rates pertain to adjustable-rate mortgages, larger down payment requirements are not exclusive to any specific type of mortgage, and the application to investment properties does not pertain strictly to fixed-rate mortgages.