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Comment by state_less | Hacker News Reader

Can anyone confirm mortgage rates in Estonia? This site[1] says ~ 2% mortgage rate, which means a -18% real rate, further pushing demand for real assets instead of paper debts.

I think the US is closer to neutral, but we still have a negative mortgage real rate at the current inflation level.

1.https://www.theglobaleconomy.com/Estonia/mortgage_interest_r...

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Not 100% sure about Estonia but at least here in Finland mortgages are usually some margin + Euribor. Maybe with optional cap on max interest rate (that usually pushes the margin up to compensate). If you manage to get a fixed rate it is usually way higher then Euribor at that moment and still only fixed for the first 7 or 10 years of the loan after that usually 12month Euribor.

For example I am currently paying only margin (Euribor was still negative when the Euribor rate was last updated for the 12month rate that I am using) so 0.4%. With Euribor steadily creeping up expecting to 3 or 4x the interest portion of my loan at the end of the year but not a big deal personally.

Can't confirm Estonia but certainly looks credible for Slovakia (1.35% - mine is 0.9%). But beware those are variable rates, so not fixed over the whole mortgage timespan but like 1/3/5/10 years, with 10 years being unusual and also the highest rate. So a lot of people who took out mortgages with 0.6% fixed for 1 or 3 years will have a hard time as the rates will climb significantly soon.

As someone who's not even thinking of buying a house, do fixed rate, fixed term mortgages even exist? It seems variable rate mortgages, while making financing more widely accessible, have caused their fair share of financial issues/instability.

Not an expert, but certainly even in Slovakia you could do an 10 years mortgage and fix it for 10 years. But people usually don't do that because money was getting cheaper until very recently and also 10 years is not enough to finance houses or flats at current prices. And fixing it for longer is either not possible or very expensive.

Seems like it depends a lot on the local practices. Here in France the vast majority of mortgages are fixed rate and term. I'm probably a pessimist but it seems way to risky to take a variable rate, who knows what the future will hold in 15, 20, or even 30 years ?

> it seems way to risky to take a variable rate, who knows what the future will hold in 15, 20, or even 30 years ?

That's my gut instinct as well.

Aren't most mortgages in the US fixed rate?

Can confirm. Mine is 1.63% + 6mo euribor rate (which was just raised over 0%). When you have the future possibility of 5% mortages, people will think twice about buying the currently expensive real assets.

On the other hand - can't say that real estate is exactly overvalued - recently they've been driven by rising construction and material costs.

Thanks for confirming euro folks. Good luck on the other side of the pond - hopefully we’ll stabilize these prices over time.

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