3 ms·

Mortgages also don't go up once you're in, so they decrease as a percentage of living cost over time (assuming no change in income), while rents go up roughly w

by bane 11y ago

Mortgages also don't go up once you're in, so they decrease as a percentage of living cost over time (assuming no change in income), while rents go up roughly with inflation.

tyingq 11y ago
Agreed, although property taxes and insurance typically do go up. How much that matters varies greatly by location.
- mgkimsal 11y ago
  We had property taxes go down (based on declining home value, of course). When renting, I never had my rent go down, even if the building values went down :) You're right, though, on tax/ins. They tend to be a much smaller portion of the outgoing. Currently combined, we're at ~$3000/year for tax/ins. Even if that went up by 20%, it's an extra $50/month (wouldn't be happy about that, but it wouldn't break the bank). Rent of $2100 going up 20% is a much huger issue.
rwmj 11y ago
Does the US not have standard variable rate mortgages? They are the norm in the UK, and they very much can go up (or down) over time, depending on the interest rate. Of course many people have assumed that interest rates will be low forever.
- tyingq 11y ago
  The US does have variable rate mortgages, but in the current environment of VERY low interest rates, they are typically only used by investors that plan on selling quickly. Most people would be getting a fixed rate these days.
- bane 11y ago
  It does, but it's generally discouraged and not common. Fixed rate mortgages are far more common and desired. We also have mortgage types that start at a fixed rate and then after some period of time become variable. Many of the variable rate mortgages also have caps on how much they can float per year.
- mikestew 11y ago
  Does the US not have standard variable rate mortgages? They exist, but I have no idea how popular they are. Some older folks like myself remember the 80s, when variable rate mortgages were more popular due to higher interest rates at the time. I also remember a few people I knew who nearly lost their house because their variable rate mortgage went up considerably (all kept their houses, but they were pinching pennies until the coins screamed). Thus I extrapolate that I'm not the only one that stays away from variable rate mortgages. That, and our current mortgage is at 2.5%.

by bane 11y ago

Mortgages also don't go up once you're in, so they decrease as a percentage of living cost over time (assuming no change in income), while rents go up roughly with inflation.

tyingq 11y ago

Agreed, although property taxes and insurance typically do go up. How much that matters varies greatly by location.

mgkimsal 11y ago
We had property taxes go down (based on declining home value, of course). When renting, I never had my rent go down, even if the building values went down :) You're right, though, on tax/ins. They tend to be a much smaller portion of the outgoing. Currently combined, we're at ~$3000/year for tax/ins. Even if that went up by 20%, it's an extra $50/month (wouldn't be happy about that, but it wouldn't break the bank). Rent of $2100 going up 20% is a much huger issue.

rwmj 11y ago

Does the US not have standard variable rate mortgages? They are the norm in the UK, and they very much can go up (or down) over time, depending on the interest rate. Of course many people have assumed that interest rates will be low forever.

tyingq 11y ago
The US does have variable rate mortgages, but in the current environment of VERY low interest rates, they are typically only used by investors that plan on selling quickly. Most people would be getting a fixed rate these days.
bane 11y ago
It does, but it's generally discouraged and not common. Fixed rate mortgages are far more common and desired. We also have mortgage types that start at a fixed rate and then after some period of time become variable. Many of the variable rate mortgages also have caps on how much they can float per year.
mikestew 11y ago
Does the US not have standard variable rate mortgages? They exist, but I have no idea how popular they are. Some older folks like myself remember the 80s, when variable rate mortgages were more popular due to higher interest rates at the time. I also remember a few people I knew who nearly lost their house because their variable rate mortgage went up considerably (all kept their houses, but they were pinching pennies until the coins screamed). Thus I extrapolate that I'm not the only one that stays away from variable rate mortgages. That, and our current mortgage is at 2.5%.