average mortgage is 30 years in the US I believe. so its even worse.I think fed has enough tools to deal with it: hike fed fund rate to 3%; sell down its massive balance.
how much damage will it do? interest up by 3% will push down the value of 10 year treasury by 30%. assume the average duration of outstanding mortgage at 10 years, then the real estate will drop by 30% as well.