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Mortgage Rates Question

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Residential mortgages may stipulate either a fixed rate or a variable rate. As a borrower, what considerations might cause you to prefer one rather than the other? Why might holders of mortgage pass-through certificates wish the mortgages to have a floating rate?

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The solution discusses considerations which to prefer, residential mortgages either a fixed or a variable rate.

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As a borrower, I would want a fixed rate mortgage if I were under the assumption that in the near future, the banks would be raising their interest rates in order to cool inflationary risks. By locking in that fixed rate, it removes the risk that would come if the banks were to ...

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