Is the 30-year fixed-rate mortgage rate responsible for a new bubble? The 30-year fixed-rate mortgage involves enduring government subsidies, pays off at a snail’s pace, renders homebuyers to years of pointless default risk, and is to blame for two taxpayer bailouts in the past 20 years.

This method concurrently drives down mortgage rates on definite loans and permits lenders to back them with negligible capitol. This spurs on a formula for bubbles and bailouts – where banks and other establishments hold more mortgage securities than would generally be permissible.

While the 30-year mortgage has a place in the U.S. housing market, it’s unclear why we should continue funding a product with this kind of history.

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