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> While this may be true, it is entirely the fault of the dumb UK mortgage market How would raising interest rates affect spending in the short/medium term if

by mvc 5y ago

> While this may be true, it is entirely the fault of the dumb UK mortgage market How would raising interest rates affect spending in the short/medium term if loans are all fixed for 30 years? I guess maybe the property market is more volatile in the US as a result of this since who would take on a 30 year mortgage when rates are above their long-term average? In the UK, if you're on a high rate (but a short contract), you can at least look forward to when interest rates fall.

jen20 5y ago
> In the UK, if you're on a high rate (but a short contract), you can at least look forward to when interest rates fall. At the cost of never being able to predict your monthly outgoings in the face of turbulent financial markets.
- lupire 5y ago
  so people will take smaller loans and pay less. This is good.
  - jen20 5y ago
    Which is absolutely not what happens. It’s manifestly not “good” by any definition.
lacksconfidence 5y ago
The way it works where i live, at least, is on all loans the principal can be paid in full with no penalty. So I get a 30 year fixed loan and when a better rate becomes available I can get a new loan and pay off the old one. The down side is transaction costs, things are getting more efficient but the owner will have to pay something to refinance the loan.