Which of the following statements about interest rates are TRUE:

Interest rates on interest only loans are normally higher than principal and interest loans. Interest rates on residential investments loans (for investment properties) are also usually higher than for loans for owner-occupied homes. If variable interest rates are expected to increase in the future, choosing a variable interest rate on a new home loan will likely reduce your interest expenses compared to choosing a fixed interest rate on a new home loan.

Neither of the statements are true (both are false)

Only statement 1 is true

Only statement 2 is true

Both statements are true (neither are false)