What term describes a set monthly payment that remains the same despite fluctuations in the interest rate?

The term that describes a set monthly payment that remains the same despite fluctuations in the interest rate is known as a fixed-rate mortgage. In a fixed-rate mortgage, the interest rate is established at the outset of the loan and does not change over the life of the loan. This consistency means that borrowers can reliably budget their monthly payments without worrying about interest rate increases, thus providing financial stability.

The other options, such as payment cap and rate cap, refer to specific mechanisms that limit the amount by which payments or interest rates can increase, typically associated with adjustable-rate mortgages. Negative amortization describes a situation where the monthly payments are insufficient to cover the interest due, causing the loan balance to grow rather than diminish, which is not related to fixed payments.

In summary, the correct term for a loan with a fixed monthly payment that is not affected by changes in interest rates is a fixed-rate mortgage.