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The Case Against 30-Year Mortgages

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13 points paulpauper | 3 comments | 11 Oct 25 16:42 UTC | HN request time: 0s | source
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jstanley ◴[11 Oct 25 17:01 UTC] No.45550727[source]▶
This isn't about 30-year mortgages in the general case, this is about the US specifically, where a fixed-rate 30-year mortgage is typical, with a good rate and no early repayment penalty.

And yes it's insane, because if rates go up you leave it alone and if rates go down you remortgage at a lower rate.

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orochimaaru ◴[11 Oct 25 17:03 UTC] No.45550744[source]▶
Why is that insane? It’s good for the consumer, no?
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jstanley ◴[11 Oct 25 17:07 UTC] No.45550786[source]▶
It's insane because why would you offer such a product? You're giving the customer a free bet on interest rates.
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1. verall ◴[11 Oct 25 17:12 UTC] No.45550826[source]▶
Because the government is interested in subsidizing residential property ownership.

Why would healthcare be free? Who would offer such a product? Because some governments are interested in subsidizing such things.

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2. jstanley ◴[11 Oct 25 17:49 UTC] No.45551137[source]▶
> the government is interested in subsidizing residential property ownership.

As an aside: that doesn't work, it just makes houses more expensive.

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3. pqtyw ◴[11 Oct 25 19:15 UTC] No.45551840[source]▶
Plenty of places don't have 30 year mortgages, variable rates might even be standard there and real-estate is still unaffordable. Until Covid housing was actually quite cheap in the US relative to income compared to many other Western countries. It still relatively is, just compare major US and Canadian cities, the gap is huge.