Ninety percent of today's homeowners choose a 30-year fixed-rate mortgage. There are many reasons for its broad appeal, including affordability, stability and flexibility. What's more, it provides you and your family with “inflation protection.”
That's right. The fixed-rate mortgage – whether it's a 10-, 20- or 30-year term – provides inflation protection, meaning that even if mortgage rates increase in the future, your mortgage rate will not change.
While inflation touches virtually everything we purchase, from a pair of shoes to a meal at a restaurant, your mortgage principal and interest payment will remain the same for the entire term of your loan. This insulates you from payment shock that comes with other mortgage types, allows you to plan your future finances more easily, and lastly, your payment will become more affordable as your household income will likely increase over time.
Be sure to visit My Home by Freddie Mac® to learn more about homeownership and follow our blog series, Why Homeownership Matters: The Triple Bottom Line, in celebration of National Homeownership Month.