A Risk Reduction Mortgage System and Method is provided. In one aspect the present disclosure is a system and method of calculating and reducing risk by offering consumers, as a feature of their mortgage transaction, the practical means of trading local price risk as measured by changes in local 5 housing price indices for the performance of the national real estate price risk as measured by a national housing price index. In another aspect, the present disclosure is a method, system, and a computer readable medium for generating and managing a risk reduction mortgage.