MORTGAGES: Toward Variable Rates

One of the advantages of buying a house rather than renting has been that mortgage rates cannot be raised as rents are. That situation may be changing. Last week the Federal Home Loan Bank Board urged that federally chartered savings and loan associations be allowed to offer mortgages with rates that would go up—or down—in tandem with the cost of money to banks. Such a measure, the board contends, would ease future credit crises in housing.

In 1973 Congressmen pressured the board to withdraw a similar proposal for variable interest rates (VIR), but that was before a credit drought drove...

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