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What characterizes a fixed-rate mortgage?

  1. Variable interest rates

  2. Interest rate changes annually

  3. Payment amount changes monthly

  4. Interest rate remains the same for the life of the loan

The correct answer is: Interest rate remains the same for the life of the loan

A fixed-rate mortgage is characterized by having an interest rate that remains the same for the entire life of the loan. This means that the interest rate doesn't fluctuate with market conditions or other factors. Option A is incorrect because a fixed-rate mortgage has a fixed interest rate, not a variable one. Option B is incorrect because the interest rate for a fixed-rate mortgage does not change on an annual basis. Option C is incorrect because while the payment amount may change for certain types of loans, a fixed-rate mortgage maintains a consistent payment amount.