4 ms·

> I have a 30 year mortgage on my house with a 2.75% interest rate. That has effectively given myself "rent control" This only works in places with fixed prope

by oooyay 2y ago

> I have a 30 year mortgage on my house with a 2.75% interest rate. That has effectively given myself "rent control" This only works in places with fixed property tax. When I lived in Texas my property tax went up hand over fist every year as my property increased in value and automatic reassessments occurred. If your salary remains relatively stagnant and does not increase with cost of living (most salaries are subject to this) then you can certainly find yourself being subject to nuevo rent rates as a long time mortgage holder. I do agree with you that different types of debt should be classified differently.

milkytron 2y ago
I've experienced this. My property taxes have gone up maybe 30% in the past few years. My income has increased pretty substantially, so it's not like I'm unable to pay for the increases. Compared to rent though, and having a mortgage where every month the amount of principle paid off increases, it still seems like the better option. Rent has increased 30-50% where I live over the same time period. At least when my property tax increases, it's because I have an asset that has increased in value. If I am at some point forced to sell because I can no longer afford the property taxes, then I'll walk away with more money than if I had been paying rent for those same years. Property taxes can force the same type of relocation that rent increases cause, but I think the typical outcome from someone being forced out by rising property taxes will be better than the person forced out by rising rents.
tombert 2y ago
Fair enough, there’s a maximum that they are allowed to raise property taxes in NYC (6% in a year, 20% over five years); my rates will eventually go up, but not super fast.
- oooyay 2y ago
  Yeap! We're subject to a similar maximum in Portland. It was one of the aspects of government I specifically shopped for before we relocated. I did wish I'd looked more into the ever-expanding income tax we have at the city, county, and state levels but that's a different cost structure that's only significantly worse when factoring in Trump era tax reform.
hifromwork 2y ago
>This only works in places with fixed property tax Critically, this also only works in places that offer fixed-rate mortgages. In my country (and most of Europe I believe) they are relatively expensive and the rate is fixed for only ~5 years (after which you either change to floating or update the rate). So basically nobody considers them long-term. Damn, I envy Americans.
- oooyay 2y ago
  Are your mortgages cheaper than ours on average? I couldn't imagine doing a variable rate loan in the US. You can literally be had in a single year with a variable rate.

by oooyay 2y ago

milkytron 2y ago

I've experienced this. My property taxes have gone up maybe 30% in the past few years. My income has increased pretty substantially, so it's not like I'm unable to pay for the increases. Compared to rent though, and having a mortgage where every month the amount of principle paid off increases, it still seems like the better option. Rent has increased 30-50% where I live over the same time period. At least when my property tax increases, it's because I have an asset that has increased in value. If I am at some point forced to sell because I can no longer afford the property taxes, then I'll walk away with more money than if I had been paying rent for those same years. Property taxes can force the same type of relocation that rent increases cause, but I think the typical outcome from someone being forced out by rising property taxes will be better than the person forced out by rising rents.

tombert 2y ago

Fair enough, there’s a maximum that they are allowed to raise property taxes in NYC (6% in a year, 20% over five years); my rates will eventually go up, but not super fast.

oooyay 2y ago
Yeap! We're subject to a similar maximum in Portland. It was one of the aspects of government I specifically shopped for before we relocated. I did wish I'd looked more into the ever-expanding income tax we have at the city, county, and state levels but that's a different cost structure that's only significantly worse when factoring in Trump era tax reform.

hifromwork 2y ago

>This only works in places with fixed property tax Critically, this also only works in places that offer fixed-rate mortgages. In my country (and most of Europe I believe) they are relatively expensive and the rate is fixed for only ~5 years (after which you either change to floating or update the rate). So basically nobody considers them long-term. Damn, I envy Americans.

oooyay 2y ago
Are your mortgages cheaper than ours on average? I couldn't imagine doing a variable rate loan in the US. You can literally be had in a single year with a variable rate.