30-Year Mortgages Are More Relevant Than Ever

During the congressional confirmation hearing for Mark Calabria, Trump’s nominee for Director of the Federal Housing Finance Agency (FHFA), senators asked multiple questions about 30-year mortgages, responding to previous comments from Dr. Calabria. Senators’ concerns were well understood by the American people: nearly 90% of loans issued by Fannie Mae and Freddie Mac are 30-year fixed-rate loans.

While these loans end up are more expensive in the long run (like most financing options other than an all-cash purchase), due to their lower monthly rates, 30-year fixed-rate loans open the doors for more people (with lower financial liquidity) to purchase houses. The stability of knowing you have a fixed monthly payment that won’t fluctuate with market changes allows you to better budget for other large expenses.

The National Association of REALTORS® has urged Dr. Calabria to keep 30-year fixed rate mortgages. Read the full statement here.