Variable-rate mortgages are ____ for the borrower and so they carry a ____ initial interest rate than do fixed-rate mortgages.

Question

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Variable-rate mortgages are riskier for the borrower because the interest rate can change, potentially increasing the cost of borrowing. To compensate for this risk, they typically carry a lower initial interest rate than fixed-rate mortgages, which have a constant interest rate throughout the life of the loan.

Variable-Rate Mortgages Are ____ for the Borrower and So They