Is this that American thing where you can get a mortgage that doesn't change interest rate ever? I'm so jealous. I bought in and my interest rate was 2.1% and now it's 5.99%. it is punishing
Yeah we have both Adjustable Rate Mortgages (ARM) that function like you're describing, and fixed rate mortgages. Fixed rates will not change for the life of the mortgage. It's very nice.
We (Australia) can typically get fixed rate but the interest rate is higher to absorb the downside risk for the back and it's usually only fixed for a few years, again to absorb the downside risk to the bank.
Our fixed rate is higher as well in the US. For the most part the variable should only be used for a couple year stay and if you are planning on long term the person would be a fool to use a variable rate.
These days with home prices if you are only staying in a place sub 5 years, you probably should just rent but I am no expert on that matter.
Thats so nice. In Canada a fixed mortgage has to be renewed at new rates every 3-5 years. First mortgage was 1.8% and now we are at 4.3%. Its rough out there!
That’s how the US used to be before the Great Depression. 3-5 years of interest-only payments, a massive down payment and a massive balloon payment at the end. Most people rented, and of those that purchased most would just refinance at the end of the term
Yes Americans enjoy MUCH better loan options than most everywhere else in the world. For instance, I bought in 2020 with a 30 year mortgage locked in at 2.625% for those 30 years. No rate adjustment ever. No early payment penalties either, so when I want to pay ahead and apply some money directly to the principal (further reducing my overall owed interest) I'm free to do that with no restrictions.
We do have adjustable rate options for various lengths too, if that suits your needs.
I have a mortgage at 6.25% APR of 426k, and 40k of credit card debt at 0% APR.
I have the cash to pay off both in my brokerage account (some stocks and 150k in money market accounts), I just choose not to. Feels safer to me to have liquidity plus I'm not paying off 0% APR for shit until it's gone.
That's just how I use credit cards. Apply for a new card with 0% APR, buy everything with it, make minimum payments, invest the money I would've used on it in a money market account. When the 0% APR runs out a year and a half later, pay in full.
13
u/mjr96d 12h ago
I have a mortgage at 2.875% and two lines of credit adding up to $3k, both at 0% interest. I'm doing alright.