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pc86

> Are high interest rates lowering the cost of groceries, gas, or the cost of living in general? No.

Limiting inflation doesn't necessarily mean causing deflation.

> Are they blowing up everyone's mortgages one by one as they come up for renewal? Yes.

This is the risk of getting an adjustable rate mortgage, which is a decision.

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I feel extremely fortunate that I was able to get a sub 3% fixed rate mortgage. I still can't believe that a lender was willing to bet that a 3% mortgage would be profitable over the course of the next 30 years. If I were a lender I wouldn't be happy with issuing fixed rate mortgages.

The lender likely sold it off. There is a good chance a Freddie Mac or Fannie Mae owns the mortgage, otherwise it may have been sold to investors. It isn't a wholly free market decision to think your loan would be profitable over 30 years.

A lot of those mortgages got sold off into MBS and then got bought out by the Federal Reserve. So if you had a 3% mortgage, chances are, the FED partially subsidized your mortgage at the expense of the American taxpayer (which is what a lot of people are rightfully angry about).

Who is angry about that (rightfully or otherwise)? I hear a lot of complaints about various aspects of the mortgage industry, and the fact that the fed partially subsidizes some mortgages some of the time is not one that I hear a lot.

Don't worry, they made a profit on your mortgage. The interest rate risk would have been hedged away in the swap market.

> This is the risk of getting an adjustable rate mortgage, which is a decision.

In many jurisdictions, adjustable rate mortgages are all that are typically available with reasonable rates.

e.g. if I check mortgage rates in Canada, I see 5-year fixed for 4.94%, 5-year variable for 5.79% and 25-year fixed for 9.75%.

The article is about the fed, so only US mortgages are really relevant.

I don't think restricting commentary in that way is reasonable. The "Do high interest rates fix inflation?" question is relevant to many countries other than the US, the top-voted comment on the the post is a link to the NPR podcast about how it relates to Turkey, and this particular comment thread is in general applicable to many countries, given how, e.g. the Bank of Canada effectively mirrors the US Fed in monetary policy.

If you want to restrict your commentary to the US, you should make that clear in your post, e.g. "This is the risk of getting an adjustable rate mortgage in the US, which is a decision."

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