Significant drawbacks to US dependence on 30-year, fixed mortgage

The over reliance on 30-year, fixed mortgages in the U.S. during the past year has significant drawbacks and contrasts sharply with the rest of the world, according to a new study sponsored by the Mortgage Bankers Association.

Some 95% of new home loans written in America in 2009 were long-term, fixed rate products. This compares to just 1% in Spain, 2% in Korea, 10% in Canada, 19% in the Netherlands and 22% in Japan, said Michael Lea, director of the real estate center at San Diego State University, who lead the study.

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