Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 2

What is the typical term length for a fixed-rate mortgage?

1. 1-5 years

2. 5-10 years

3. 10-20 years

4. 20-30 years

The correct answer is: 10-20 years

The typical term length for a fixed-rate mortgage is commonly recognized as 20 to 30 years. This duration is standard in the industry because it balances manageable monthly payments for borrowers with the lender's need to receive a steady stream of interest income over a longer period. A 30-year mortgage, for example, is particularly popular because it allows for lower monthly payments compared to shorter-term loans, making homeownership more accessible. Additionally, fixed-rate mortgages provide stability in payment amounts, which means that borrowers are protected from fluctuations in interest rates over the life of the loan. This predictability is a significant advantage for many homeowners. While other options may exist (such as 15-year or 10-year mortgages, which are sometimes offered), the 20 to 30-year range encompasses the most widely offered terms in the market, aligning with the majority of consumer preferences.