Hacker News Reader

> The real reason people invest in real estate is because they can walk into a bank and get a low interest rate 30 year loan to buy that investment

This is true in the US but it's not true in other Anglophone nations with high real estate prices such as the UK or Australia.

View on HN

> This is true in the US but it's not true in other Anglophone nations with high real estate prices such as the UK or Australia

It was definitely true until very recently. Interest rates of 1-2% weren't unheard of. Many of my friends had to really tighten up their finances when their interest rate from 1.2% to 5%.

The low rates was true. But not the 30 year term. Most mortgages in the UK are fixed for 2-5 years so people are much more exposed to fluctuations in interest rates than in the US.

We have the same thing in the US for mortgages, called the adjustable-rate mortgage (ARM). It got a very bad rep after the 2008 housing meltdown so it’s generally seen as a bad tool for consumers these days. Hence the current predicament - many American homeowners refuse to move because it means giving up a sub-4% loan. Which is essentially free money because of the current inflation rate.

Reply on news.ycombinator.com