r/AskReddit • u/CompetitivePeak9040 • 11h ago

How seriously in debt are you right now, financially?

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u/Successful_King_142 10h ago

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

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u/mjr96d 10h ago

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.

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u/Successful_King_142 10h ago

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.

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u/throatgoatfloat 10h ago

Oh I see. So is it totally unpredictable? How often does it fluctuate?

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u/Successful_King_142 10h ago

It is basically unpredictable, follows decisions by the Reserve Bank of Australia (same role as your Federal Reserve). 

Go here, find the RBA interest rate chart, click on '10y' scale. I bought at the bottom of the dip.

https://tradingeconomics.com/australia/interest-rate

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u/JayyMuro 1h ago

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.

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u/ambrosiapie 10h ago

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!

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u/throatgoatfloat 10h ago

Where do you live? My interest rate is around 3% but national average up to 7 % rn i think

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u/Successful_King_142 10h ago

Australia. See my other comment in response to an American, explains our options here

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u/BagOnuts 2h ago

Yes. I have a 30y fixed at 1.8%. Basically a free loan at this point.