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13 points paulpauper | 3 comments | | HN request time: 0s | source
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jstanley ◴[] 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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ljlolel ◴[] No.45550787[source]
that's how all bonds/loans work
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jstanley ◴[] No.45550790[source]
It's not how bonds work because you can't pay off a bond early other than by buying it on the open market at the prevailing price.

And furthermore, not all loans are fixed-rate. UK mortgage rates are relative to the Bank of England base rate.

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1. MattPalmer1086 ◴[] No.45550847[source]
Some variable rate mortgages in the UK are. You can also get fixed rate.
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2. jstanley ◴[] No.45552528[source]
Fixed-rate mortgages are offered in the UK, but they are only fixed at a good rate for a short period of time (maybe 2-5 years) before they go up to an unreasonable rate, which would force you to renegotiate the mortgage to get the new prevailing rate at that time.

So it's effectively a variable rate anyway.

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3. MattPalmer1086 ◴[] No.45552709[source]
Well, a series of shorter term fixed rates. Which I guess makes it variable over the entire lifetime of the mortgage, but a bit more predictable than a true variable rate.

You can get 10 year fixes, but they are of course more expensive than shorter term fixes.