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by jandrewrogers
1187 days ago
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In the US almost all mortgages are fixed rate, so the monthly payments don't change. The interest rate does not change for the life of the mortgage, often 30 years. Because a mortgage can be refinanced, this causes a downward ratchet on interest rates for mortgages over time. This is one of the ways in which a mortgage is a hedge against inflation and rising costs. There are tens of millions of Americans with a mortgage rate in the 2.5-3.5% range because the mortgages pre-date the current rise in interest rates. What this does impact is the ability of people to move houses, since a new mortgage would be priced to current market conditions. |
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