An adjustable-rate mortgage increases interest rate risk for the ____, but reduces interest rate risk for the ____.

Question

An adjustable-rate mortgage increases interest rate risk for the ____,  but reduces interest rate risk for the ____.

Quizplus · Accepted Answer

An adjustable-rate mortgage increases interest rate risk for the borrower because their payments can go up if interest rates rise. It reduces interest rate risk for the originator (lender) because they can adjust the rate to match market conditions, protecting their interest margin.

An Adjustable-Rate Mortgage Increases Interest Rate Risk for the ____