One who intends to leave others better off for his having existed.

12/19/09

Why would Federal Reserve Chairman Ben Bernanke refinance his short-term adjustable rate mortgage to a higher 30 year fixed rate?


The Fed chairman was in an adjustable rate mortgage with a rate that started at 4.125% in 2004 and adjusted after five years to a rate that would be 2.25 percentage points above one-year Libor, which as of the first reset date in June was a little more than one and a half percent. [2.25 + 1.5 = 3.75%]


 


Wall Street Journal Via Calculated Risk


December 19, 2009


 


 


TIME: So, did you get a fixed rate at 5%? I think this might be the most valuable piece of information. (Laughter.)



Bernanke: Thirty years fixed rate at a little over 5%.

 


Time Via Calculated Risk


December 19, 2009


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