The Federal Reserve in the United States has now cut their prime interest rate three times in as many weeks in an attempt to stave off a recession that many believe has already arrived. Unfortunately the US Real Estate market, which is dominated by long term fixed rate mortgages will not benefit from these cuts in the same way as home-owners in European countries do.

The problem lies in the historic nature of mortgage lending which varies considerably in the US from the standard model used across Europe. In the US it is commonplace to take out a mortgage with a twenty-five year fixed rate at the time of purchase, rather than rely on the fluctuating standard variable rate mortgage that is more commonplace in the UK and across Europe.