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Interesting, in NZ you have an interest rate you pay to the bank for your mortgage that has to be renewed every few years. This interest rate is definitely impa
by procinct 5y ago
Interesting, in NZ you have an interest rate you pay to the bank for your mortgage that has to be renewed every few years. This interest rate is definitely impacted by inflation. Does the US/where you are from not have a similar system?
- MontyCarloHall 5y agoNope. Most mortgage rates are fixed for the full term of the loan (typically 30 years). If you can afford the down payment, it’s a great time to buy a house. (Even better would have been a few months ago, before inflation started to kick into high gear).
- WanderPanda 5y agoHow much interest do you pay on a 30 year fixed interest mortgage? Seems like a total no-brainer if it is below 2-3%
- dominotw 5y ago2 - 4% these days. Its only a no brainer only if property prices never go down, which does seems to be the case these days.
- procinct 5y agoHoly shit that is insane. You’re right, that is indeed inflation proof. Is this the US?
- thehappypm 5y agoYes. Fixed mortgages are the norm.
- neltnerb 5y agoThere are several varieties, fixed rate mortgages exist for 10-30 year terms. Adjustable rate mortgages also exist and commonly with a lower starting interest rate, but they are often a trap for people with low incomes who suddenly cannot afford their home because of interest rates outside their control. And some mortgages have a cliff, so that you're paying mostly just interest and very little principle. Then at the end of the term you basically have to pay the entire principle at once. So you can do it either way. A fixed rate is vastly less risky, I'm surprised that an adjustable rate is the default in NZ. In the time I've had a home rates have varied from like <3% to 7%.
- procinct 5y agoWe have fixed and floating. But generally the absolute max you would fix for is 5 years. People commonly fix for 1 year.