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0 pointsthrow0101c9h ago0 comments

> Especially if you’re positioned to buy when you can lock in low mortgage rates. Above 6% you might be better off putting your down payment into the stock market and renting.

"Locking in" a rate for multiple decades is mostly (only?) an American thing:

* https://www.tandfonline.com/doi/full/10.1080/15214842.2020.1...

* https://www.investopedia.com/why-your-30-year-mortgage-exist...

* https://www.cnbc.com/2024/05/07/why-the-30-year-fixed-rate-m...

* https://www.deeded.ca/blog/why-canada-doesnt-have-30-year-fi...

While a ≥20 year amortization period is common, the mortgage term is generally shorter (2-5, 10 years) is most other places.

0 comments

fuomag95h ago

In italy not only you can lock it, you are allowed to change bank for lower rates (surroga) without any penalty

tomjakubowski5h ago

Also true in the US, the term of art here is "refinancing". Just about every homeowner I knew during Covid refinanced and now has a rock-bottom interest rate on their mortgage.

The downside of doing that is you end up "locked in" to the property too. They now have a strong disincentive to sell, because they'll lose that sweet sweet interest rate and relatively low payment. I'm unsure what the broader effect is on the market.