4 ms·

> 30 year fixed rate mortgages Wait, what? Americans can fix for 30 years?!! The longest I've seen in Australia is 7 years fixed, but the usual home loan is 3-

> 30 year fixed rate mortgages Wait, what? Americans can fix for 30 years?!! The longest I've seen in Australia is 7 years fixed, but the usual home loan is 3-5 years fixed and then a renewal at the new market rate.

Jacqued 4y ago
Here in France people only ever do fixed rate, generally for 20 or 25 year mortgages. I have never heard of someone buying a home with a variable rate loan, not sure if it's even legal. It might have been a pretty good deal for the people who bought homes with 25 year 0.7-0.9% interest rate mortgages these last few years.
- kgwgk 4y ago
  Variable rate loans do exist in France and they were relatively popular 15-20 years ago (up to 38% share). https://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=304.RAI.M.FR.SVLHPHH.EUR.MIR.Z https://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=304.RAI.M....
- alfiedotwtf 4y ago
  As an Australian, fascinating! I would guess that Tue majority of home loans here are variable. Another question - with a normal fixed interest loan for 30 years, does that normally include paying off the principal? I.e after the 30 years, the loan is paid off? Here, fixed interest usually don't pay down the loan whereas a variable loan pays down 100% of the principal after the 30 years
  - Jacqued 4y ago
    Yes you do pay down the principal. Non-amortized mortgage loans might exist but if they do they're definitely marginal.
rvense 4y ago
In Denmark, 30 years fixed rate is the standard mortgage. I think it was basically the only way to own a home until "liberalizations" in 2002, and some of the more.. creative financial products that showed up are what ended up causing trouble after 2007.
bkberry352 4y ago
The majority of American homes are fixed for 30 years
- alfiedotwtf 4y ago
  Wow. After a 30 year fixed loan, do you then own the home? See my comment above
  - cardiffspaceman 4y ago
    Yes, the certified accountant's term is fully-amortized. Each fixed payment includes an increasing share of principal and a decreasing share of interest. This applies whether the interest rate is fixed or not. Also you always own the home as long as you are meeting the terms of the mortgage contract.
    - alfiedotwtf 4y ago
      Mind blown. How did Australians get it so wrong then :( Fixed for 30 years plus paying down the principal is genuinely mindblowing to me, especially at the fixed interest rates of last year.
      - cardiffspaceman 4y ago
        There are quite a few mortgages in the states that don't pay the principal until the end, but it creates drama at the end. Some friends of mine went that route and when the principal came due after 5 years, lots of assumptions turned out to be wrong and they had to sell to pay back the principal.
        alfiedotwtf 4y ago
        Yikes. Yeah, that sounds like how normal fixed-interest works here :(

Jacqued 4y ago

Here in France people only ever do fixed rate, generally for 20 or 25 year mortgages. I have never heard of someone buying a home with a variable rate loan, not sure if it's even legal. It might have been a pretty good deal for the people who bought homes with 25 year 0.7-0.9% interest rate mortgages these last few years.

kgwgk 4y ago
Variable rate loans do exist in France and they were relatively popular 15-20 years ago (up to 38% share). https://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=304.RAI.M.FR.SVLHPHH.EUR.MIR.Z https://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=304.RAI.M....
alfiedotwtf 4y ago
As an Australian, fascinating! I would guess that Tue majority of home loans here are variable. Another question - with a normal fixed interest loan for 30 years, does that normally include paying off the principal? I.e after the 30 years, the loan is paid off? Here, fixed interest usually don't pay down the loan whereas a variable loan pays down 100% of the principal after the 30 years
- Jacqued 4y ago
  Yes you do pay down the principal. Non-amortized mortgage loans might exist but if they do they're definitely marginal.

rvense 4y ago

In Denmark, 30 years fixed rate is the standard mortgage. I think it was basically the only way to own a home until "liberalizations" in 2002, and some of the more.. creative financial products that showed up are what ended up causing trouble after 2007.

bkberry352 4y ago

The majority of American homes are fixed for 30 years

alfiedotwtf 4y ago
Wow. After a 30 year fixed loan, do you then own the home? See my comment above
- cardiffspaceman 4y ago
  Yes, the certified accountant's term is fully-amortized. Each fixed payment includes an increasing share of principal and a decreasing share of interest. This applies whether the interest rate is fixed or not. Also you always own the home as long as you are meeting the terms of the mortgage contract.
  - alfiedotwtf 4y ago
    Mind blown. How did Australians get it so wrong then :( Fixed for 30 years plus paying down the principal is genuinely mindblowing to me, especially at the fixed interest rates of last year.
    - cardiffspaceman 4y ago
      There are quite a few mortgages in the states that don't pay the principal until the end, but it creates drama at the end. Some friends of mine went that route and when the principal came due after 5 years, lots of assumptions turned out to be wrong and they had to sell to pay back the principal.
      - alfiedotwtf 4y ago
        Yikes. Yeah, that sounds like how normal fixed-interest works here :(