Is It Time To Rethink the Traditional Fixed-Rate Mortgage?
Episode Description
Recent Wharton research looks at how lower interest rates impacted homeowners – with some surprising results. More: http://knlg.net/2eKWBkk 📂 Finance & Accounting;Real Estate;Public Policy 🏷️ Research
Brief Summary
Ben Keys discusses how monetary policy affects households via adjustable rate mortgages, highlighting significant payment reductions and consumer behavior changes.
Key points
- The Role of Monetary Policy. Ben Keys discusses how monetary policy affects households through the mortgage market.
- Impact of Interest Rate Reductions. Research shows significant reductions in mortgage payments can lower default rates.
- Adjustable Rate Mortgages vs Fixed Rates. The study highlights the benefits of adjustable rate mortgages over fixed-rate contracts.
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Episode highlights
- The Role of Monetary PolicyBen Keys discusses how monetary policy affects households through the mortgage market.“Lower interest rates actually hit consumers' pocketbooks through the mortgage market.”0:31Nov 23, 2016
- Impact of Interest Rate ReductionsResearch shows significant reductions in mortgage payments can lower default rates.“Mortgage defaults fell thirty-six percent for this group who received this reduction in payments.”2:39Nov 23, 2016
- Adjustable Rate Mortgages vs Fixed RatesThe study highlights the benefits of adjustable rate mortgages over fixed-rate contracts.“In downturns, adjustable rate mortgages look like a really convenient mechanism.”6:36Nov 23, 2016
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