How the f can you have such a big mortgage, with a variable interest rate, and sleep at night ?
I'm french, and everyone I know has a fixed interest rate. dont know if it is mandatory, but God, I am so glad that my interest rate will never spike.
I'm french, and everyone I know has a fixed interest rate. dont know if it is mandatory, but God, I am so glad that my interest rate will never spike.
Curious how does federal govt subsidize them?
Through the VA Loan, FHA Federal Home Loan, and USDA Rural Loan programs.
> Cheap 30y fixed rate home loans are an American thing. The federal government subsidizes them.
This statement sounded like 3oy fixed rate is possible only because of fed govt. meaning if its wasn't for fed govt subsidies 30yr fixed rate wouldn't have been possible.
FHA alone accounts for something like 1/5-1/4 of all home mortgages, varying slightly over time; and, its entire purpose was to shift the whole market (which it did).
How does high prices help the people govt is trying to help. All this makes no sense to me. why are they doing this.
Yeah when I asked (in France) about variable rates to a credit guy recently he looked at me like I was an alien. They probably still exist, but the loan-happy people won't even try to sell them, to me at least.
Average 30 year mortgage is paid off in 11 years.
Many Swiss have fairly dangerous interest rate exposure (to the SNB) based on the assumption that it will continue selling francs to keep exchange rates more competitive, etc.
That will be true … until it isn’t…
In the beginning of the mortgage, the principal is higher, thus the interest portion is higher. In the first five years of a thirty year mortgage, a very small percentage goes towards the principal.
Assuming a thirty year fixed rate mortgage and a 7.5% interest rate, less than 15% of the mortgage payments in the first five years go to paying down the principal [1].
[1] https://www.bankrate.com/mortgages/amortization-calculator/