What is included in the Monthly Fixed Installment?

The Monthly Fixed Installment refers to the portion of a mortgage payment that is specifically allocated to cover the principal and interest of the loan. This is a standard practice in mortgage agreements where borrowers make consistent monthly payments over the loan's term.

The principal is the original amount borrowed, while the interest is the fee charged by the lender for borrowing that money. Each payment made by the borrower reduces the principal and pays the interest for that month. This structure allows borrowers to gradually pay off their loan over time.

Option B, while it mentions a monthly payment, incorrectly implies that taxes and insurance are part of the fixed installment calculation. In practice, these costs are often collected separately in an escrow account rather than included in the fixed principal and interest payment. Option A focuses solely on the interest portion, which does not represent the total monthly payment. Option D restricts the payment to property taxes, completely overlooking the interest and principal components essential to the monthly installment.

Therefore, the Monthly Fixed Installment specifically being the portion that goes towards both principal and interest is the correct understanding of what is included in this term.