“While this feature is attractive for homeowners, it comes at a significant cost as buyers of mortgage backed securities (‘MBS’) require a significant increase in spread to compensate them for giving the borrower the option to prepay at anytime.”
He said an MBS investor has estimated that shifting to a structure with penalties could cut the rate on a standard 30‑year Fannie or Freddie loan by about 65 basis points, giving borrowers a choice to “obtain a 30-year prepayable mortgage at today’s ~6% rate, or at a 5.35% rate, but with the obligation to pay a prepayment penalty if he/she refinanced in the future.”
Ackman added that “locking in the 65 bps savings upfront over the life of the mortgage may be the difference between the borrower being able to afford the home and not being able to.”
He also floated variants with five‑ or ten‑year “lockout” periods and suggested making the loans portable so that “if the home is sold, the new borrower could assume the loan and no prepayment penalty would be owed on a sale.”
President @realDonaldTrump and @SecScottBessent, and @pulte, I have a simple idea on how to lower mortgage rates and spreads:
One of the unique features of U.S. conventional mortgages is that they are prepayable at any time without a penalty.
While this feature is attractive…
— Bill Ackman (@BillAckman) January 10, 2026
Trump bond‑buying move already pushed rates lower
Ackman’s proposal followed Trump’s directive for Fannie and Freddie to purchase $200 billion of mortgage‑backed securities, a move that helped pull average 30‑year rates below 6% for the first time since 2022.