[timidiceball]

The us is unusual in offering fixed rates that are fixed for 30 years. They mean fixed rate.

[gedy]

And to OP, fixed meaning the rate does not change for entire loan. I've heard some non US folks describe their mortgages as "fixed", but only for a few years.

[pridkett]

This is more of a problem in terms of how people understand their product - which is to say, it’s difficult to understand. Many people have adjustable rate mortgages which have a low initial rate for 1, 3, 5, 7, etc years after which point it floats.

These mortgages are good for people who believe they will sell their home within the time interval or, occasionally, the person who believes they will be able to refinance their mortgage.

However, as prior to 2022, mortgage rates were super low and an ARM offered little advantage against a market where you could get a 2.25% 30yr fixed, the became slightly less common the last few years.

[EdwardDiego]

Thanks, how common are 30 year fixed mortgages? In NZ, I've never seen a bank offer a fixed rate for any longer than 5 years, and 5 years tends to be 1.5 - 2% above a 6/12 month fixed rate term.

[isitmadeofglass]

What’s unusual about that? Seems widespread throughout the world.

[michael1999]

Canada and the UK tend to offer variable rate mortgages, or mortgages with rates fixed for terms of 1, 2, 3, 5 or 10 years, with corresponding premiums over variable based on the term risk. The US actually fixes the rate of the mortgage for the whole 25-30 year amortization period. That creates a LOT of funding risk for the lender, and generates a lot of the craziness in your mortgage market.

Maybe a better way to say it, is every mortgage in Canada is what Americans would call an ARM.

[EdwardDiego]

I don't think that exists in my country.