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Comment by pstack | Hacker News Reader

Market fluctuations should only impact you when it comes time to sell. Unless your mortgage is an adjustable rate, which is part of the reason we're in this whole mess in the first place. Put enough payment down up front so that you can lock in a good rate that you can tolerate and don't play the ARM game. That seems like lose-lose, to me. Maybe things go really wonky and I find in five years that I could have locked in an even better rate if I just waited? Well, that sucks, I suppose -- but I locked my rate in at an amount that I was willing to commit to (and I bought far less house than I could afford, so that I had some long term wiggle room).

Unless I'm missing another aspect of potential impact, which is totally possible. I can barely tie my own shoes, sometimes. :)

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Just curious (because I've never honestly looked) - can you really lock in a rate for the entire, say, 25 year length of the mortgage?

When I asked a mortgage broker friend (Canadian) about this not too long ago, it was explained to me that yes you could lock in a rate for the "term" - but the "term" was 5 years, and after 5 years it would be adjusted depending on the prime rate, etc..... so from what I gathered you coudln't actually just get a plain old "25 years, x%" mortgage.

In the US, it's standard to have a fixed rate for the entire life of the mortgage. It's my understanding that this state of affairs is due to US laws and that most other countries tend to have floating rate mortgages.

That may explain why renting is the norm in a lot of other countries and owning a home isn't considered a big deal (while, in America, it's almost an obligation before you can feel like you've made it). Shifting terms is unsettling. I don't know the history of loans in the states, but I wonder how much of the 30yr fixed was established in response to everyone returning from service after WWII and starting families and buying property?

Dunno about Canada, but in the US a fixed-rate mortgage is, well, fixed. My rate will never change, and thus my monthly payment will remain exactly the same for the 30-year life of the loan.

Canada is distinctly different than the US. I was also surprised when I realized this difference. The scary part of this all is that even though folks with good credit were able to taken advantage of full-term fixed rate mortgages (i.e. prime borrowers), the US still endured the housing bust long after the majority of the sub-prime borrowers defaulted.

I'm not sure about other Commonwealth countries, but Canada definitely does not have this option. Our mortgages have a specific mortgage rate term (usually 3-5 years), separate from the life-time of the mortgage (usually 20-30 years; the 35 was/will be no longer be available). This means that interest rate fluctuations are more devastating when they rise for those who put little to no money down on their expensive housing purchases in Canada recently.

There are longer then 3-5 year mortgage terms in Canada. I believe up to 15 years is commonly offered.

Amortization length of a mortgage can be up to 35 years for residential mortgages. 35 year amortizations were only eliminated for CMHC/insured mortgages.

I would contend that the system is more stable when borrowers are forced to consider the consequences of future interest rate increases.

I have a 15 year 4.0% fixed mortgage. Got it a few months ago. In Seattle.

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