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Only in part. A lot of loan and mortgage contracts (at least in the EU) have provisions built in that allow banks to reject down payments over a specific limit,

Only in part. A lot of loan and mortgage contracts (at least in the EU) have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%. If push comes to shove, the state might even force you to mortage your home to finance itself after crisis [0]. It surely helps debtors a bit, but you can't just go to your bank with a single note and be done. [0] https://de.wikipedia.org/wiki/Zwangshypothek#Geschichte https://de.wikipedia.org/wiki/Zwangshypothek#Geschichte (unfortunately only in German)

pydry 5y ago
>have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%. That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month? I have heard of this sort of thing happening to some people when hyperinflation kicked in - effectively getting a free house/car/etc.
- Sebb767 5y ago
  > That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month? This is in addition to monthly payments. So if you take a loan for 480$ at 0% total interest (just for nicer numbers) for 48 months, you'd pay 10$ per month, but you'd only be able to pay an extra 24$ per year to get rid of the loan sooner. So if the currency hyper-inflates in year two, you'd still own ~206$ [0] once the state revalues the debt. Of course, the bank is still free to accept higher payments (sometimes for a fee) if it thinks it's the better option. The German word for this is Sondertilgung. You can find it explained here [0], for example. I'm not too familiar with the US system, so I can't say how common these clauses are over there, but I'd be surprised if banks didn't cover themselves , too. [0] A bit less if you start paying sooner or agree to pay fees. [1] https://www.berliner-sparkasse.de/de/home/privatkunden/immobilien/ratgeber/sondertilgung.html https://www.berliner-sparkasse.de/de/home/privatkunden/immob...

pydry 5y ago

>have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%. That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month? I have heard of this sort of thing happening to some people when hyperinflation kicked in - effectively getting a free house/car/etc.

Sebb767 5y ago
> That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month? This is in addition to monthly payments. So if you take a loan for 480$ at 0% total interest (just for nicer numbers) for 48 months, you'd pay 10$ per month, but you'd only be able to pay an extra 24$ per year to get rid of the loan sooner. So if the currency hyper-inflates in year two, you'd still own ~206$ [0] once the state revalues the debt. Of course, the bank is still free to accept higher payments (sometimes for a fee) if it thinks it's the better option. The German word for this is Sondertilgung. You can find it explained here [0], for example. I'm not too familiar with the US system, so I can't say how common these clauses are over there, but I'd be surprised if banks didn't cover themselves , too. [0] A bit less if you start paying sooner or agree to pay fees. [1] https://www.berliner-sparkasse.de/de/home/privatkunden/immobilien/ratgeber/sondertilgung.html https://www.berliner-sparkasse.de/de/home/privatkunden/immob...