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Wow. And I've seen people here (justifiably) roll their eyes over 6 and 7 year auto loans. A 140 year mortgage can't possibly be appreciably different from ren

Wow. And I've seen people here (justifiably) roll their eyes over 6 and 7 year auto loans. A 140 year mortgage can't possibly be appreciably different from renting.

alkonaut 9y ago
> A 140 year mortgage can't possibly be appreciably different from renting. The fact that as a homeowner ("owner") you can deduct interest rates, means that by "renting from the bank" you have a 30% rebate compared to renting from a landlord, and obviously you have no landlord taking a cut on top of that. So apart from the risk of depreciation, people seem to have little interest in owning their homes outright. So people pay off quickly in the beginning to get some margin on their valuation, but after that when the loan is e.g. 50% of the valuation, people might prefer buying a car to paying off $10k per year on their home. And it's probably better to have a mortgage fixed at 50% forever with 2-3% interest rate, and avoid the car loan with 5% interest.
- votepaunchy 9y ago
  The landlord is also getting the “30% rebate” by claiming interest as a business expense to offset rent revenue.
  - marvin 9y ago
    Yes, but landlords also pay taxes on profits. As a homeowner, you won't pay tax on the difference between rental cost and your mortgage interest payment.
    - kgwgk 9y ago
      In some countries you get taxed on the imputed rent (the amount of rent that you would be paying gets added to your taxable income). https://economix.blogs.nytimes.com/2013/09/03/taxing-homeowners-as-if-they-were-landlords/ https://economix.blogs.nytimes.com/2013/09/03/taxing-homeown...
      - votepaunchy 9y ago
        In the US home sale profits are taxed as capital gains with an exemption based on marital status. It's hard to compare, though, since homeowners are not permitted to write off routine maintenance as would a landlord. Would be interesting to simplify tax codes and handle homeowners as both renter-landlord on their own home.
- moduspol 9y ago
  Makes sense. Thanks
- ptaipale 9y ago
  In Sweden, the deduction is more limited; a deduction of 30 % of interest up until 100 000 SEK, and 21 % over that amount. As nominal marginal tax rates are somewhere in the 40-50 % range, this typically means <15 % actual reduction in taxes.
rypskar 9y ago
A car decreases in value each year, houses on average over time increases in value. Rent also increases but the loan don't increase so only changes in the interest will change how much you have to pay. (Not saying 140 year mortgage is a good thing, plan to pay down mine in 10-15 years if I don't move, but still think it could be better than renting)
- moduspol 9y ago
  You're right--auto values don't increase the way houses typically do, so it's not the best comparison.

Wow. And I've seen people here (justifiably) roll their eyes over 6 and 7 year auto loans. A 140 year mortgage can't possibly be appreciably different from renting.

alkonaut 9y ago

> A 140 year mortgage can't possibly be appreciably different from renting. The fact that as a homeowner ("owner") you can deduct interest rates, means that by "renting from the bank" you have a 30% rebate compared to renting from a landlord, and obviously you have no landlord taking a cut on top of that. So apart from the risk of depreciation, people seem to have little interest in owning their homes outright. So people pay off quickly in the beginning to get some margin on their valuation, but after that when the loan is e.g. 50% of the valuation, people might prefer buying a car to paying off $10k per year on their home. And it's probably better to have a mortgage fixed at 50% forever with 2-3% interest rate, and avoid the car loan with 5% interest.

votepaunchy 9y ago
The landlord is also getting the “30% rebate” by claiming interest as a business expense to offset rent revenue.
- marvin 9y ago
  Yes, but landlords also pay taxes on profits. As a homeowner, you won't pay tax on the difference between rental cost and your mortgage interest payment.
  - kgwgk 9y ago
    In some countries you get taxed on the imputed rent (the amount of rent that you would be paying gets added to your taxable income). https://economix.blogs.nytimes.com/2013/09/03/taxing-homeowners-as-if-they-were-landlords/ https://economix.blogs.nytimes.com/2013/09/03/taxing-homeown...
    - votepaunchy 9y ago
      In the US home sale profits are taxed as capital gains with an exemption based on marital status. It's hard to compare, though, since homeowners are not permitted to write off routine maintenance as would a landlord. Would be interesting to simplify tax codes and handle homeowners as both renter-landlord on their own home.
moduspol 9y ago
Makes sense. Thanks
ptaipale 9y ago
In Sweden, the deduction is more limited; a deduction of 30 % of interest up until 100 000 SEK, and 21 % over that amount. As nominal marginal tax rates are somewhere in the 40-50 % range, this typically means <15 % actual reduction in taxes.

rypskar 9y ago

A car decreases in value each year, houses on average over time increases in value. Rent also increases but the loan don't increase so only changes in the interest will change how much you have to pay. (Not saying 140 year mortgage is a good thing, plan to pay down mine in 10-15 years if I don't move, but still think it could be better than renting)

moduspol 9y ago
You're right--auto values don't increase the way houses typically do, so it's not the best comparison.