A borrower is offered a choice between a fixed rate mortgage and a variable rate mortgage.The fixed rate mortgage may be more attractive if the borrower expects:
A)Inflation to decrease
B)Inflation to increase
C)The home price to increase
D)The home price to decrease

Question

Quizplus · Accepted Answer

If the borrower expects inflation to increase, interest rates are likely to rise, making a fixed rate mortgage more attractive as it locks in the current lower rate.

A Borrower Is Offered a Choice Between a Fixed Rate