30 year mortgages are standard in the US. If the bank thought that in 28 years the house would be a foot underwater they wouldn't agree to a 30 year mortgage. 30 years or 50 years depends on which projections you are listening to
30 year mortgage is simply too long for me. I don't have that kind of stability. Mortgage term limit should be 10 years or maybe 15 with 20% down, that would solve a lot of problems. Before you say that I can choose to pay it off in 10 years - I can't. Too many dinks in my area are maxing out on their 30 year mortgages and inflating the cost of housing all around - I wouldn't be able to afford payments on 10 year term loan.
A variety of countries have longer dated mortgages than 30 years, and 30 years in the US is arbitrary.
Many people from Western countries don't know that the US mortgages mostly top out at 30 years and find that just as peculiar, just as OP's article about the UK is peculiar. Sweden has mortgages that are between 30 and 50 years and their recent law limits them to 105 years as the maximum.
It has nothing to do with more recent housing affordability trends.
It's arbitrary.
Longer mortgage = more debt paid to lender, and another demand driver towards more lack of affordability.
Guys, don't downvote him. Many parts of the world do it like that- your 30yr mortgage is really a series of 5yr balloon amortized for a 30 year period. They don't have the option of a true 30yr fixed.
haha, sorry I actually meant to say 30 years (I had the formula more or less memorized for mortgages which were 30 years, but 20 years more makes a huge difference, as it tursn out!).
There no rule that the mortgage will run for 30 years. It’s just what most people choose. But there’s nothing stopping anyone from paying back the entire mortgage in 10 years.
When were you born, and what country do you live in?
As someone born in the 1980s in the USA, I don't think this is true. I believe that the 30 year mortgage has been the standard here since sometime in the mid 20th century.
For the USA specifically, does being underwater actually matter as long as you can afford the repayment? It's my understanding that most mortgages are fixed for 30 years so your interest rates won't be changing?
It's the same in Australia, New Zealand, UK and probably other places too. 30 year fixed rate mortgages are probably the exception rather than the rule in most places.
You can get a 40 year mortgage at many banks now. I doubt 40 year mortgages will ever catch on. The banks generally charge a higher interest rate for the longer term so the payments aren't much cheaper than a 30 year loan.
Interesting. In Canada you can only get up to 5 years fixed typically. Mortgage itself is 25 years but terms change every 5 usually. 30y fixed feels... Crazy. How much above market does it have to be for banks to take that risk??
What’s insane about a 30-year fixed mortgage? That’s literally the most common term for a mortgage in the US and I’m willing to bet many other western nations.
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