Something is good for consumers so it must be a problem. Fucking economists.
It’s not good for the consumers, that’s the issue.
So whats your solution, fuck everyone with higher rates and force people that have lived in the same home for many many years to sell due to external factors outside of their control?
Well, I live in the UK right now and what people are doing here is that they live in a house for 5-10 years and then swap it to a bigger one. You will get a lot of equity in 5-10 years, so you can remortgage, get a better house and pay less. Or they move to cheaper areas and buy mansions for the price of a flat in London.
And even if you don’t want to move, you can remortgage and pay less simply because your debt is much smaller now. Also before current rate rises people with high equity would remortgage at super low %, take cash and invest it. 10 years later you’re rich AF doing fuck all.
This entire article is about how it favors consumers vs mortgages in other countries.
No, the article is about how our fucks those, who want to buy a house, but can’t afford it anymore.
Fta: "It’s a one-sided bet,” said John Y. Campbell, a Harvard economist who has argued that the 30-year mortgage contributes to inequality. “If inflation goes way up, the lenders lose and the borrowers win. Whereas if inflation goes down, the borrower just refinances.”
Yeah won’t someone think of those poor lenders who make…let’s check my notes…130% on their investment or more over the 30 years and it is amortized so you pay the most interest up front in the first decade? Even if you refi you still start that interest over and pay thousands in closing costs to the bank on top of it.
Waahhhhhh Cry me a fucking river.
Lmfao The reason rate are locked is obvious.
Why should I lose my home because interest rates changed and your mtg goes up 40%?That’s what happens with 5 -15 year loan terms.
A buddy in the UK is facing this now. Because he can’t get a 30 year loan and can’t pay off his house he’s forced to restrcture and his payment is going from $800 to $1300.Man look at all that inequality defeated just like the article says it would be…not.
Don’t forget that your buddy has enjoyed years of super cheap mortgage unseen in the US.