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It's a bit of a half way point between variable rate mortgages and fixed 30-years that works better for everybody- most of the time. The banks are protected fr
by mabbo 4y ago
It's a bit of a half way point between variable rate mortgages and fixed 30-years that works better for everybody- most of the time.
The banks are protected from whatever might happen a decade down the road. The homeowner has at least a few years of consistency. Usually, if rates have gone up a lot since the homeowner started the mortgage then they can refinance a new 30 year at the slightly lower principal remaining, cushioning the increase.
It's only a bad thing if rates go up very suddenly, as we're seeing.
- nine_zeros 4y agoThe question is, why would some countries have 30 yr fixed and wouldn't other countries have them?
- pixodaros 4y agoFor the same reason why two countries have any policy difference? Unless something is obviously a good idea for all parties, it will only be enacted after a political struggle. The outcomes of political struggles are not deterministic. Often one jurisdiction tries a new policy, others look at it and see problems, but the first jurisdiction never gets around to fixing it.