The ________________ is much less for variable rate mortgages than for fixed rate mortgages.

Question

Quizplus · Accepted Answer

Interest rate risk and prepayment risk are both typically lower for variable rate mortgages than for fixed rate mortgages. Variable rate mortgages adjust to current interest rates, reducing the lender's interest rate risk. They also have lower prepayment risk since borrowers are less likely to refinance when rates decline, as their rates adjust automatically.

The ________________ Is Much Less for Variable Rate Mortgages Than