3 ms·
Although true in Europe, the US is less susceptible to this because of our 30 year fixed rate mortgages. In fact, here, it's the opposite: interest rate increas
by throwawaygh 5y ago
Although true in Europe, the US is less susceptible to this because of our 30 year fixed rate mortgages. In fact, here, it's the opposite: interest rate increases -> decreased housing prices -> decreased tax assessments -> lower total cost of ownership for already-issued loans -> less risk of default for current home owners.
In a vacuum.
- xxpor 5y agoI think the risk in the US is if house valuations fall too much and you're severely underwater, people will just walk away from mortgages. I believe we saw this in 08. Not as direct a risk in non-fixed mortgage countries, but still an issue.
- jacquesm 5y agoPlenty of fixed rate mortgages in Europe. 30 year fixed is about 2% here at the moment.
- cromka 5y agoReally? WherE? I thought it was exclusively US thing, with UK having some fixed mortgages that were otherwise too expensive to justify choosing them.