Is It Important to Save the 30-year Fixed-Rate Mortgage?

Last week, we asked you to share your thoughts on preserving the 30-year fixed-rate mortgage. Here’s how you responded. Selected reader comments at the break.

You said:

“The stability and predictability of housing provides an important and irreplaceable foundation for families and communities. Short term investment, which is one of the selling points for adgustable rate mortgages, creates vulnerability to market risk, interest rate risk and refinance risks related to those as well as employment risks and other factors.”

“When a borrower, particularly a working- or middle-class family, enters a contract with a financial institution or with the entities in the financial industry, they are in a power relationship where they have a lot less power. ARMs, as currently designed, use the power of the financial institutions and financial industry to push as much risk on to the borrower as possible and keep as much profit for themselves as possible. Let’s ask a different question. What do CDFIs, credit-unions, and other financial institutions in the “fair risk/fair benefit” sector, need to extend mortgages and other financial products to a bigger market? What do we need to do create more informed consumers?”

“With fixed-rate, people know with certainty what they will be paying. Adjustables may go up or down. In recent years they have gone down but that has not always been the case and may not be the case in the future. Adjustable rate mortgages protect the lenders.”

“It is one of the safest and most affordable ways to spread out the payments for a home purchase. Adjustable rates are too risky, and shorter-terms are too expensive for most people.”

Matthew Brian Hersh served as senior editor at Shelterforce from March 2008 to October 2012. He studied English at Rutgers University and has spent his professional career in journalism, policy, and politics.


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