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Comment by jdasdf | Hacker News Reader

It's practically impossible to get fixed rates in europe.

No. That’s not the case. I had a fixed rate mortgage in the UK. Now I have one in Ireland. Two of my colleagues have taken them in the last couple of months. They’re very common. But.. in both countries such terms are for a relatively short period. E.g 5 years fixed changing to SVR for the remainder of the loan. I haven’t heard of loans fixed for the entire duration. I would’ve got one if I had found it.

I can’t speak for the rest of Europe. It’s a big place you know.

That’s not what Americans mean by “fixed rate”. In US, that means 30, or more rarely 15 year mortgage, where the rate is fixed for entire duration. The mortgage where it’s only fixed for some initial period is called “adjustable rate mortgage”. Your comment just supported the person you replied to being correct, that fixed rate (in US sense) mortgage market is nonexistent in most of Europe.

You can absolutely have a 30 year mortgage that is fixed all the way through. It's rare that people take it though, most opt to 5-10 years fixed with variable late afterwards from my own experience (Austria). The standard product used to be fixed rate.

In France 99% of mortgages are fixed rate, for the entire term.

They're often called "lifetime fixes" or "fixed for term" in the UK. You can easily get them. The term customers choose is typically 25 years rather than 30. However they are currently running at an interest rate of a little under 4% which is much higher than the rate offered on a typical 5 year year fix. This makes them unattractive when you can just perpetually keep re-mortgaging on 5 year fixes.

> However they are currently running at an interest rate of a little under 4% which is much higher than the rate offered on a typical 5 year year fix. This makes them unattractive when you can just perpetually keep re-mortgaging on 5 year fixes.

Renewing after 5 years will presumably get you whatever rate is then? Which might be much higher.

It's always better to get a fixed rate (for the life of the loan) mortgage. If rates go up, you're protected. If rates go down, you can refinance to cheaper rates.

Well it's an unknowable gamble. You might also be locking in an excessively high rate. The flexible approach of continuously re-mortgaging would have been the better strategy for the last 10 years with interest rates that went down. In the next 10 years, who knows.

> Well it's an unknowable gamble. You might also be locking in an excessively high rate. The flexible approach of continuously re-mortgaging would have been the better strategy for the last 10 years with interest rates that went down.

There is no gamble, that's why it is almost a free lunch. If rates keep going down as last ~10 years, you're never locked in, you keep refinancing to a lower and lower rate. If rates go up, you stay put with a fixed rate that can't ever go up. You win both ways.

I didn't correctly read your comment sorry. I don't know about the US system, but here the fixes normally do have a lock-in typically on a ratchet system where they are expensive to exit in the early part of the loan and cheaper later. For example one I just checked charges you 5% of the loan to exit any time in the first 5 years and then 3% to exit any time in the next 5 years. There is also a significant discrepancy in the interest rates charged for different term lengths e.g. the offer presented may be 3.7% for a lifetime fix or 2.4% for a 5 year. So you're paying 1.3% extra for the lifetime fix right out of the gate. So the gamble is will 5 year fixes cost more than 3.7% in 5 years time? If not, then you won on the 5 year fix.

I see, interesting! Agreed, on such a system it becomes more of a gamble to pick what might be best long term.

In the USA there is no penalty to pay off a loan and refinance (there might be exceptions but never seen one) so you can do it at any time as frequently as you like and keep ratcheting the rates down.

There's also not such a huge difference. Looking at zillow today, 30-year fixed shows 4.95% and a 7-year adjustable at 4.81%

30 year fixed mortgages in the US typically allow prepayment with no penalty other than some relatively nominal origination costs on the new loan, so you have a free option to lower by taking out a new mortgage when rates drop, while being protected on the other side. That combined with a few other features make them an extraordinarily good deal (especially when they have a strongly negative real rate, like now).

In the US, the standard product for many decades was a 30 year, truly fixed rate mortgage. Any of the adjustable rate products with an initial period of fixed rates are still called adjustable rate mortgages (ARM) and are short-handed as the fixed period stroke the adjustment frequency. A 7/1 is fixed for 7 years, then adjusts every year. (Annoyingly, a 5/6 is 5 years fixed and adjusting every 6 months.)

When people in one market talk about their fixed rate mortgages adjusting rates, it sounds strange to people familiar with other markets, just reinforcing the “real estate is local” adage.

As others have said, "Europe" doesn't exist for things like mortgages.

In France, for example, the standard mortgage is fixed rate, for the whole duration of the loan, which is usually 20 to 25 years.

In the UK it's very common, albeit not for 30 years - more often 2, 5, or 10. See e.g.

https://www.bankofengland.co.uk/bank-overground/2020/why-are...

(In 2020, more than half of new mortgages were fixed for 5 years or more.)

That's not fixed rates, that's just variable rate with a delay, it's impossible to get a 30 year loan with a fixed rate in Croatia.

It's not in the Netherlands. Practically everyone has fixed rates here. Especially in the past few years with the low interest rates.

Fixed for the entire duration of the mortgage, and at the rate the commenter mentioned?

Mine is fixed for 20 on a 30 year mortgage but you can always choose between variable, 10 year fixed, 20 year or 30 year.

Mortgages are (almost) always 30 years duration.

I don't know what country in Europe you can't get fixed rates but it's not the Netherlands, that I know for sure. (Also there really isn't a 'Europe' for these things, every country is different)

> Mine is fixed for 20 on a 30 year mortgage

In the United States we don't call that "fixed". We call that an adjustable rate mortgage. For example, my mortgage is fixed at 3% for its entire 30 year term and can properly be called "fixed".

People in the United States are leery of ARMs after what happened during the mortgage crisis in 2006-2011 so proper labeling is more important.

Ah, right.

I could also have picked 30 years for a 'real' fixed mortgage. It just gets a bit more expensive. But it's definitely possible to get 30 year fixed if you really want to, every bank offers it.

In the Netherlands an 'adjustable rate mortgage' means monthly, quarterly or yearly variable rates.

Adjustable rate mortgages aren't quite the same.

Canada is similar to the UK - you amortize (pay back) the loan over 25-30 years. However, your mortgage is either variable (interest rate floats over time) or fixed (interest rate does change), but the loans are only for 1 to 5 years. At the end, you either "renew" your mortgage with the same lender or you "refinance" entirely.

So you can have a "fixed" mortgage, but not for the entire amortization period. But you're correct, it's more similar to the ARM mortgages in the US (potentially fixed for 5-10 years, then floating after).

Ah so what I meant is that in Czech Republic I have a 30 year mortgage with a rate that is fixed at 1.99% for 5 years, and is then variable (or more likely renegotiated) after that period. I am sure I could have instead gotten a 30 year mortgage with a single rate for the duration, but I suspect it would've been higher than the rate. But if you're at a 2% for 20 years that is pretty great IMO - given that our rates are currently through the roof.

what? I got a fixed below 1% rate in Belgium last year. With historical lows on those everyone gets a fixed rate.

Uhm my brother just signed a fixed rate of 1.8% for the entire 20 year duration of his home loan. Belgium.

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