Instead, they can sell the loans they make to investors, and then take that money and make more loans.Īll of this means more loans available to you, and at better terms. They create a market for mortgages in the US, so lenders don’t tie up their money for three decades when they make mortgages. ![]() The payment may be calculated based on a 25-year repayment, but your rate is only guaranteed for up to five years, and after that you have to refinance at the current rate.įannie Mae and Freddie Mac are two big reasons we have 30-year fixed home loans in the US. In Canada, for instance, the longest term for a fixed loan is five years. The US is almost the only country in the world where homebuyers can get 30-year fixed home loans. Verify your new rate (Oct 3rd, 2021) Helping Americans Get Better Loans The two government-sponsored enterprises (GSEs) don’t actually make loans, but they buy loans from lenders.Īnd that helps keep your interest rates lower. ![]() In the world of mortgage loans, two important names stand out: Fannie Mae and Freddie Mac.
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