Hacker News Reader

Comment by jonatron | Hacker News Reader

France also does long term fixed mortgages. No idea why.

It's to encourage home ownership, which may or may not be a laudable goal.

Personally I take advantage of it and think it's not necessarily a bad thing, but wish it was more direct about what it's trying to do.

If a government wanted to encourage home ownership, it would either incentivize building more homes to bring down price, and/or give cash to people so they are able to buy. The latter option would require government taking from richer to give to poorer, or issuing new money, which is sort of the same by reducing purchasing power of money,

The long term fixed rate mortgage is where no wealth gets redistributed today, but rather from future taxpayers or users of the currency.

if government wants to encourage buying, it must make take private equity and wallstreet out of property speculation. They leave swaths of properties empty just for the purpose of land banking.

Secondary step would be to make landlord-ing less attractive by giving tenants a lot of rights, naking them hard to evict, thank kind of thing.

This would make houses less atractive as an investment asset.

Lastly you could increase property taxes, again driving down atteactivenes of hiuses to investment.

Beinging down price of houses is easy. The question is what do you do with all the people who bought a house for 500k and now its worth 250k and they are stuck

The amusing thing about the 30yr fixed is the average lifetime of them - many people would do between with an arm with a ten year fixed period.

Depends how much lower the interest rate for 10 year ARM is.

For example,

https://www.mortgagenewsdaily.com/

Reports 30 year fixed is about 7.32% and 5 year ARM is about 6.75%. A 10 year would be somewhere between that, but if I was choosing with less than a 52 basis point difference, I would go with 30 year fixed due to less downside risk of my mortgage blowing up.

At 30 year mortgages of 2% to 4%, no brainer to just go with 30 year even though you might pay a $1k more in interest every year. But you might not, and you definitely will not pay more than a $1k extra in interest since it is locked in.

If the 10/1 ARM was 5% and 30 year was 7%+, I would think about the 10/1 ARM.

When everyone is invested into society, we have incentives to defend the status quo, thus making our society stable. In the next generation or two we'll get to see what happens when half of the men of the nation don't own anything of substance and have no meaningful connections to society.

Yeah there’s a secret dark opposite of NIMBY - WGASA (who gives a shit anyway) and that can end up much worse in the long run.

Part of the problem for communities starts when not all participants live in the community - if the grocers and workers and police are “imports” from the suburbs or other areas you start to get divergent goals and WGASA starts to take hold.

Homeownerism sounds like a regional form of nationalism where an us Vs them conflict is actually the point. The problem is that once you understand the problem as a politician the only thing you can do is do even more nationalism by including the formerly excluded and doing an us vs the world because not having an enemy and cooperating with everyone else is unimaginable.

Reply on news.ycombinator.com