Mortgage lenders normally charge a higher initial interest rate on adjustable-rate mortgages than on fixed-rate mortgages.

Question

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Mortgage lenders typically charge a lower initial interest rate on adjustable-rate mortgages (ARMs) than on fixed-rate mortgages because the interest rate on ARMs can change over time, potentially increasing, while the interest rate on fixed-rate mortgages remains the same throughout the life of the loan.

Mortgage Lenders Normally Charge a Higher Initial Interest Rate on Adjustable-Rate