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.