Hacker News Reader

If the house is worth a lot more than the debt, you don’t see many foreclosures. An owner could simply sell their house and keep the profit, or take out a HELOC. Foreclosures are much more common when the debt level is high and/or the house is under water.

View on HN

It's also dependent on the jurisdiction. In some cases the lender doesn't actually have a right to proceeds in excess of their loan amount (plus interest, penalties and fees).

One other thing to consider is brand reputation. Most lenders, big bank lenders at least, don’t want their brand being the one that took a family home away. Often before things get real bad they will offer to break the term and let you refinance somewhere else.

In the US 30 fixed have no prepayment penalty.

That's a good deal! In Canada pre-payments often result in fees, which isn't ideal. Good(ish?) news is the banks will let you transfer out with no fee (or a reduced fee) if they want to remove your risk from their portfolio.

Reply on news.ycombinator.com