The US may soon say goodbye to the fixed rate mortgage. Many Americans still enjoy 30-year, fixed-rate home mortgages. But moves are afoot in Washington to create a policy on "floating" mortgages. Those are loans whose interest rates rise and fall with market conditions.
If something isn't done, mortgage markets might dry up, officials say. Lenders are afraid to make 10 percent loans that can be wiped out by 13 percent inflation.
"In an inflationary economy," says one bank official, "fixed-rate mortgages are obsolete."m