Which of the following is a drawback of variable interest rates for borrowers?(1 point)

Question

Responses

Variable interest rates are predictable and harder for borrowers to budget for.
Variable interest rates are predictable and harder for borrowers to budget for.

Variable interest rates are initially higher than fixed interest rates.
Variable interest rates are initially higher than fixed interest rates.

Variable interest rates can increase until the borrower can no longer afford them.
Variable interest rates can increase until the borrower can no longer afford them.

Variable interest rates can decrease and save borrowers money.

Answer 1

The correct response that highlights a drawback of variable interest rates for borrowers is:

Variable interest rates can increase until the borrower can no longer afford them.

This indicates the risk associated with variable interest rates, as they can lead to higher payments that may become unmanageable for the borrower.