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A fixed-rate mortgage is characterized by a constant interest rate throughout the life of the loan, which means the monthly principal and interest payments remain the same from the first payment to the last. This stability is advantageous for borrowers who prefer predictable payment amounts and want to avoid the risk of rising interest rates.

In contrast, an adjustable-rate mortgage (ARM) has an interest rate that can fluctuate over time based on market conditions or a specific index. These fluctuations can result in varying monthly payments, making it more challenging for borrowers to budget for their mortgage costs in the long run. The potential for increased payments can be appealing in a declining interest rate environment, but it carries risk if rates rise.

The other options do not accurately capture the key differences between fixed-rate and adjustable-rate mortgages. For instance, both types of loans can be offered by various lenders, including banks and government entities, and the term lengths do not inherently differ between fixed and adjustable-rate options. Additionally, down payment requirements can vary widely depending on the loan type and lender, rather than being inherently tied to whether the loan is fixed or adjustable.