Investors like guaranteed mortgage certificates because they pay a higher interest rate than government and corporate debt while being reasonably secure investments. However, investors should be mindful of the dangers associated with guaranteed mortgage certificates, such as inflation risk, which means that the value of these bonds may decrease if inflation rises. There’s also the possibility that you won’t get your whole investment back if enough of the underlying mortgages fail. In a climate when interest rates are decreasing, these certificates may lose value if too many mortgage borrowers pay back their debts, lowering the value of the certificate. Furthermore, investors cannot assume that the federal government would continue to fund Fannie Mae and Freddie Mac permanently, and if the businesses are privatized, investors should be wary of the danger of these corporations failing. You may not get all of the payments you are entitled if the company from whom you purchased a guaranteed mortgage certificate fails.