Which statement is true regarding variable rate mortgages?

Variable rate mortgages are designed to fluctuate according to market conditions, making the statement that the rate is influenced by these conditions accurate. This means that as interest rates rise or fall in the broader economy, the interest rate you pay on a variable rate mortgage will change accordingly, ultimately impacting your monthly payments.

The other options do not accurately reflect the nature of variable rate mortgages. For instance, the first statement is incorrect because the hallmark of a variable rate mortgage is that its interest rate is not static but rather dynamic, fluctuating along with the market. The assertion that variable rate mortgages are generally more expensive than fixed-rate options does not hold universally, as the costs depend on the prevailing interest rates and market trends at any given time. Lastly, while some mortgages may include prepayment penalties, this is not a defining characteristic of variable rate mortgages specifically, as prepayment penalties can also be associated with fixed-rate mortgages and are dependent on the terms set by the lender.