A Freddie Mac fixed-rate mortgage product refers to a mortgage loan that is originated, funded, and serviced by a lender but is ultimately sold to Freddie Mac, a government-sponsored enterprise (GSE) established to provide stability and liquidity to the mortgage market.
With a Freddie Mac fixed-rate mortgage, the interest rate remains constant for the entire loan term, providing borrowers with predictability and stability in their monthly mortgage payments. These loans typically have terms ranging from 10 to 30 years, allowing borrowers to choose a repayment schedule that best fits their financial situation.
Freddie Mac fixed-rate mortgages are popular among homebuyers and homeowners who prefer the security of knowing that their mortgage payments will remain the same over time, regardless of changes in the broader economy or interest rate fluctuations.
It’s worth noting that while Freddie Mac purchases these loans from lenders, it does not directly lend money to consumers. Instead, Freddie Mac facilitates the flow of funds from investors to lenders by buying mortgage-backed securities (MBS) backed by pools of mortgages, including fixed-rate mortgages, which helps to provide liquidity to the mortgage market and promote homeownership.
