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Why? In a country with mostly variable rate interest rates like NZ, and at most 5y fixed loans, that's disastrous. But in markets like the US where you can fix
by IkmoIkmo 5y ago
Why? In a country with mostly variable rate interest rates like NZ, and at most 5y fixed loans, that's disastrous. But in markets like the US where you can fix your payments for 30 years, driving your purchasing decision by the affordability of those monthly payments which are fixed for the entire duration of the contract, is a very decent foundation for a market.
- SilasX 5y agoI didn't mean it's necessary a bad choice for the individual, just that it's a systemic issue. When people only think in terms of monthly payment, then total prices become unmoored from fundamentals. But I agree I haven't (and probably can't) spell out this intuition rigorously.