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And the lenders don’t lose at all! They borrow the money at current rates, and immediately package it off to a mortgage backed security and sell it within weeks of closing. The only potential “loser” is the investor that buys the security, but that’s just the nature of investing.

Yeh this is just thinly veiled propaganda.

Came here to say the same thing. What a bullshit article.

C'mon it worked out for the banks though!! The ones that are still around, anyway....

I took a combo loan, one 10 year ARM, and a 20 year fixed. I know I probably won't get a better deal when my rates inevitably increase at year 10, but saving almost 1.5 percent over ten years is nice. Hoping to have it paid off by year 15, so 5 years at a higher rate should be okay for now. Short-term arms are crazy.

imagine

Nobody has been building new homes!

Do you live in the US? People have been flocking out of the cities to the rural parts of the country because of WFH. I work in general residential contracting in a town that was 20,000 citizens five years ago and is now over 100,000, and we've had to turn away probably 50 potential clients this year alone. We're booked under contract for the next four years.

People are absolutely buying new homes, but not having to make daily commutes to the downtown office is giving them the ability to build in historically cheaper parts of the country.

Don't worry, we're actually building a lot of them out here in the totally-long-term-sustainable desert of Phoenix area.

Canada's the same to a max of 5 yrs. You can get longer ones but the rates suck

My understanding is because it's Canadian law that after 5 years banks can no longer charge you for early cancellation. In the states they can for the entire duration of the mortgage. Which, benefits the banks when rates go up, the buyer when rates go down (and the opposite in the states)

It's awesome knowing my payment won't change aside from maybe a bit more each year due to any potential tax increase!

How do you not panic realizing interest rates are rocketing and you'll be priced out of your own home and you can see it coming and there's nothing you can do???

What a shit system that must feel like.

Most people can't afford the real cost of a home and instead end up paying something like 2.5 times the value in interest over those 30 years. Those who can will always go for a 15 year loan and try to pay it off somewhere in the 10 - 12 year range, the rest just pay interest for decades.

You can choose to have a lower term mortgage if you want to.

Canadian here. It's 5 years for us!

You can also get 15 year loans with fixed rates here in the states. They’re usually .1% better on the interest rate compared to a 30 year, so for most people it doesn’t make sense to go with a 15 year when you can pay substantially less on a 30. Plus homes here are very much a very safe investment. When you own the home you only pay property tax generally after you pay the mortgage and in states like California that can mean an incredibly cheap place to live once paid (I’m talking 100s of dollars a year, though that will go up over time).

People bitch about housing here in the states, and it’s definitely not as good as it once was, but it’s also not as bad as many other places. I travel to Canada regularly and their shit is fucked. 😅