77 - Variable Rate Mortgages

There is a flaw in our society. The flaw is mortgages. The interest rate on mortgages is controlled by the federal government. When the economy is good, they raise the interest rate on mortgages. This make interest on mortgages more expensive. Thus people's mortgage payment is higher. Right now the interest rate is 7% roughly. When people buy houses right now, they lock in the 7% interest payment. This 7% interest rate will never go down or go up. When the economy is bad; the interest rate goes down. It was 4% a few years ago.

Rather than having changing rates on the federal level we should have variable rate mortgages. When the government changes the interest rate, it should up date on the mortgage payment. The interest rate should go up with the changing federal rate. If the interest rate goes up to 7%; people should pay 7%. When it goes down to 4%; people should pay less. This is a variable interest rate that changes according to the health of the economy.