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Comment by datavirtue | Hacker News Reader

Thirty year mortgages have always been a bad deal. No different now.

The 30 year fixed mortgage is a product that gets massive implicit government subsidies. It is a terrible deal for the American taxpayer. Note that this product can simply not be available in other countries.

Are you trying to claim it's a bad deal for the mortgagor? That is a claim that's going to require quite a lot of evidence.

That's wrong, long term exist rates exist all over Europe. France has very popular 20 year fixed mortgages at great low rates, 30 years are not uncommon. Before recent inflation causing rate hikes, you could access interest rates between 1% - 3% for these types of deals

Can confirm. I have 30 year fixed at 1.2% here in Spain

I fixed the wording to be more clear about what I meant. These are also often subsidized products.

Long-term fixed rate is still a relative rarity globally, especially in the US style where there are no prepayment penalties. France is a notable exception, as specified in https://business.sdsu.edu/research/_files/_realestate/intern... , but still doesn't have the prepayment-penalty-free nature (though prepayment penalty amounts are capped by law).

Just to double check, are you sure those 30 year are fixed?

I have a 25y mortgage at 1.28 fixed. I accessed it less than 3 years ago. Italy

Can you elaborate? Compared to 15 year, or renting, or paying cash?

How is a 30y mortgage of 2.5% from two years ago a bad deal, when rates are now at 7%? That is mid six figures of $ savings.

This. Even if you could buy the house outright for cash, it still would have made sense to get one of those mortgages, base on that (reasonable even at the time) expectation that risk free rates would swamp that value soon enough, and, no surprise, here we are!

I was pondering that tradeoff myself two years ago, having retired early from crypto. The only issue is, to get the 2.5% you had to show Fannie Mae-acceptable regular income. Which is still possible: the FIRE people have a system for putting your money in a trust that pays it right back to you[1], then waiting two months to establish a history, and then you dissolve the trust once the mortgage is finalized and you've closed and moved in.

I would have done that myself except that it would involve putting a big delay on my search. Early comment about it: https://news.ycombinator.com/item?id=31000286

[1] https://old.reddit.com/r/fatFIRE/comments/ojs18l/obtaining_a...

They were sitting at 2-4% for about a decade in the US. Pretty great deal if you ask me

Can confirm, was a good deal

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