I think 30-year fixed mortgages are somewhat of an American phenomenon (perhaps due to the luxury of having the global reserve currency). They are not generally available in Canada or UK, where 5-year fixed rates are the norm.
When I bought (UK) five years ago, I went for a 10-year fixed rate, which was the longest I could find. Currently very happy with that choice. Shorter fixes were available at slightly lower rates, but at this point I still have 5 years of 2.64% in hand, by which time the house will be close to paid-off.
In my case I went for a 5 year fixed because if I save at the same rate in those 5 years as I have in the last 5 years (which given my mortgage repayments are 75% of the rent I was paying prior, for much more house, shouldn't be too challenging, even with the inflation), then if rates are shit in 5 years I can pay off like 40% of the mortgage after the fixed rate and still have lower payments than I do today.
20 year fixed interest rates are a thing in Germany. With an option for mortgage owner to buy out the lender after 10 years without additional costs. 5-10 years fixed rates are cheaper but way to risky IMHO.
smodo|3 years ago
kaushikc|3 years ago
monkeynotes|3 years ago
jfk13|3 years ago
Macha|3 years ago
hef19898|3 years ago
lotsofpulp|3 years ago
What does this mean? Are there usually early repayment penalties for home mortgages in Germany, or is it simply not allowed?
In the US, I have never read about not being able to pay or a penalty for paying the entire mortgage at anytime.
jonatron|3 years ago
bombcar|3 years ago
Personally I take advantage of it and think it's not necessarily a bad thing, but wish it was more direct about what it's trying to do.