At this point I’m just buying an RV.
Bank workers are, at best, getting a small bonus when you sign that mortgage. Your fellow worker isn’t the enemy.
The american dream of home ownership is rooted in settler colonialism, and used as a tool to keep workers in debt and afraid to take risks organising
I would rather eat my own children than sell them out to the future the banks have in mind.
These people have abandoned humanity.
These people have abandoned humanity.
Well fucking said.
A 350k house assuming the national average on taxes and interest rates comes out to just shy of 1 million dollars. Over 650k in interest. The payment is $1700 which to put it in perspective my home was 260k at 2.8% interest and my payment is $1830 on a 30 year mortgage.
I mean honestly good luck finding a 350,000 home. Even the homes that are 40 years old in my area are selling for 4 to 500,000. The new home build s are averaging 400 to $450,000 to start. So getting a home at $260,000 that you got would be a dream.
I mean I bought a 2100ft² house on 0.8 acres in 2024 for 320k @ 5.5%, 11 miles put from the center of one of the 50 most populated cities in the US.
Not the best deal, not the worst, but definitely possible
2300 sqft historic home in a capitol city downtown… 8 years ago… but I do have to put up with a few quirks like the homeless everywhere and the serial killer that was actively preying on them for several years, and the sword-carrying superhero who then came along to patrol and ‘fight’ this killer.
We have a security system.
I want to know more about this vigilante sword man
You can still find sub 50k homes, but you will have to temper your expectations for the area and condition. Can’t be afraid to learn a few renovation tricks and get your hands dirty!
I ain’t moving to rural Mississippi
So why do houses exist if nobody can have one?
Corporations are people and they can have as many as they want???
Decoration/stepping stones toward getting a hotel.
A 50 year mortgage will be a lot like renting. Because the bank will own your shit until you die.
That’s what we get for saying “why can’t I get a mortgage when I pay more in rent just bc my credit is bad”, the banks figured out how to rent properties to you.
So I did the math. A 30 year fixed and a 50 year fixed have a monthly payment difference of $1.
What the absolute fuck.
With this math I just acquired a 10 year fixed for $1 more per month.
What?
Some random numbers that are of course VERY variable, but I just ran the calcs with 400k, 5% down, 6% APR for 30 and 50 years
$2648 for 30 years $2369 for 50
Now that is of course not a great deal, presumably you’d also get a little better rate for the longer loan (more points) but it’s not a dollar.
Edit: wait you’ll get a better rate for the shorter term loan, so this will probably further close the gap. Still not to $1 surely
Don’t forget that on top of all of that you have to pay property taxes.
The calc I used for that number put $3k property tax annually amortized, good call
I just question if the 50 is getting the same rate as the 30. Obviously, all else equal, math is math. Banks see that $300 savings as a potential extra $150 a month.
This raises questions about the opportunity cost of $300/mo. It’s not a huge amount of money, but for some budgets, it might make a car payment or groceries possible. Or, if saved or invested wisely, would it tip things in favor of the 50-year term?
$300/month (at the beginning of the month) invested over 30 years, compounded annually at 6% = $198,290.40
If you kept that going for a full 50 years, the last 20 years of interest really starts to ramp up and gives you a final value of $1,084,402.22
If instead, you ONLY paid the mortgage for 30 years, then invest the full mortgage payment of $2,648 into the investment account for the next 20 years (a total of 50 years out. Same end point) you would have an investment account worth $1,215,042.49
So, even in your scenario it is still a loss to take a 50 year over the 30 year, and the 300$ difference is negligible. If $300 was the difference of someone being able to afford groceries or not for the month, then they should not have qualified for a $2,648/mo mortgage.
Because for the first lot of years you are paying basically 0 principal
I owned my first house for 19 years, which was purchased in the fall of 2006. We sold it for the exact same price as we paid for it, and barely came out ahead. I know it was poor timing, but the idea of leaving a home and using it as part of your retirement income is a lie. The banks are laughing all the way to the bank.
Median home prices peaked at $216,000 in August 2006. The lowest they’ve been in 2025 is $414,000. You had some absolutely atrocious luck. You buy in Detroit or something?
Not who you responded to but it depends entirely on the location. In the northeast there is decent and consistent appreciation and there has been for decades because it has always been populated. But home appreciation over 20, 30, or 50 years will struggle to beat the S&P500. Factor in property taxes and upkeep and you may just barely keep up with inflation. Just from inflation $216k in 06 would be $358k in 2025. As an asset its primary function is being a store of wealth that happens to be the roof on your head, something you can refinance to borrow money, and something to sell basically to pay for whatever you downgrade to when you enter the stage of preparing for death, whether it’s a condo or a nursing home.
All the money to be made comes from buying in bulk and renting out to people who cannot afford because everyone bought to rent out, while local government restricts supply through zoning because it would lower property values of everyone who only had their house as retirement because wages have not kept up with productivity or inflation and pensions and unions have been gutted.
Why would anyone take one out in that case then? You can always overpay and pay it off sooner though.
I can’t believe this is real.
Home ownership out of reach? No problem, just never own a home. Bing bang boom.
We laugh at this, but the older generations still remember when the mortgage interest was this high. I don’t know where you guys are from, but there is an old news reel from the 1970s here in Ireland when young families at the time complained of “high” house prices of up to 72,000 pounds, with mortgage interest of 14%. The folks on social media had their jaws dropped on learning of how high the interest rate was, but how cheap the overall property value was back then. Now how much are those said houses at the moment? They are now worth between €690,000 to €1.5 million. High valuation but the interest rate is down in proportion. In any case, only few could afford to buy houses these days due to inflation and wages haven’t kept up with it.
They actually ended up getting married after that hug.
Which couple?
Yes.
My favorite part of this whole 50 year mortgage thing is the shock that you’d pay like $1.7m for a $400k house over the 50 years while not batting an eye at paying $900k for a $400k house over 30. It’s even funnier because houses don’t have a set value, can change on a whim and have become a path to wealth instead of the necessity that is shelter.
The quality of the materials and the precision of the build has gone down while the prices rise, and everyone’s like “oh this sucks, but the market”.
At least cars are considered a valid housing choice these days, which is why car prices are rising.
Honestly, I thought it is actually not allowed in a lot of states to live in your car.
So that’s why PC cases have gotten so expensive.
Like stocks, and art, they’re only as valuable as what people will pay for them.
If you want a shelter, you can use sticks and leaves in the forest and build something halfway decent at least. If you want a building to call your home, pay up dickhead.
Meanwhile, people who should be buying are renting, people who should be renting are in airbnbs or living in their cars, and the family dwellings are owned either by some jerkwad who wanted an income property, or a corporation that just felt like owning more land because they could.
I’m so proud of our society. Such progress! Capitalism is great!
“Like stocks, and art, they’re only as valuable as what people will pay for them.” Except this only takes into consideration what the rich will pay and that sets the “value”. I’m a people and my value for things is super low.
Average age of a first time homebuyer is now over 40. Even at a reasonable interest rate, most buyers would die before they actually own the house.
As intended
Can’t pass it on to your kids when the bank forecloses on it
Were not enough boomers taking them up in reverse mortgages?
Because that’s where all my “generational” wealth went. “We can’t take it with us Jimmy” though we did, in fact, take it from those who came before.
The year I turned 40, was the year I moved into my first non-rental property.
I’m living proof that shit is fucked up
I’m a couple of years older and JUST escaped renting. It’s ridiculous!
I’m turning 40 in a few days. I finally moved into a crazy beat-up fixer-upper/possible crime scene about 3 weeks ago.
Late stage capitalism demands that you will own nothing.
I know someone living in the Netherlands (home of Lemmy.world!) that told me they had interest only mortgages that didn’t pay toward the principal and that this was common over there. It seems like these new 50 year mortgages in the USA are a step going that same way. Anyone from that area confirm this?
Screw .world
you…realize thats not only where this Lemmy Community is…but also your user account, right?
At that point, the bank is buying the house, they’re just renting it to you for a very cheap rate, with the stipulation that you’re responsible for all of the maintenance and etc. The “purchase” is just you entering into a long-term rental agreement.
It an overall bad deal in my mind, but there are some upsides (not enough for me to take it). Assuming you get a fixed rate, you lock in your payment and your “rent”/mortgage will decline over time just from inflation eating away at it. I think most folks would love to have their rent decline by 3% every year. This effectively does that.
Additionally, if you are the homeowner instead of the renter, if the real estate increases in value, when you sell, you pocket the increase. There’s nothing like that in renting.
Without the benefit of renting. Hell don’t forget home insurance.
There is still some optionality like maybe you get a windfall from a boomer dying and you can pay the principal. Or in 30 years your currency devalues to the point you can afford the principal.
Anyway it all feels like fool’s hope. Situation is fucked.
I’m Dutch, just bought a home, and I’ve never heard of that.
Edit: I think that is called an “aflossingsvrije” mortage, banks stopped providing those after 2008 for obvious reasons.
Eidt 2: Apparently it still exists, but can no longer be used to finance an entire house. From my research it is often still possible for up to 50% of a house’s value. It was also not an option in the way we bought our house.
Congratulations on your new home!
Thanks for providing that info on the “afloasingsvrije” mortgages. It was a few years before 2008 when she bought, so that tracks with what you’re reporting.
Here in the USA we have fixed rate mortgages, where you have a single fixed interest rate for the entire length of the mortgage, but I know that not all countries have that. From what I understand in Canada the rates fluctuate during the mortgage where you can get something like fixed for 5 years (maybe 10?) but then the rate can increase on the existing mortgage you’ve already got.
How does the Dutch system work? Fixed for life of mortgage? Continuously variable? Fixed for a time like Canada? Something else?
We have different types of mortages, but most (maybe all, at least the most common types) have a fixed rate over 30 years. Maybe variable rates exist, but they are at least very uncommon. Shorter mortages are also possible I think but are of course very expensive.
One weird thing we have is that part of the interest you pay is tax deductible. (Progressive parties are i.m.o. rightfully trying to abolish this subsidy for the owning class, but I digress.) for this reason there is a type of mortage where you first only pay the interest, and slowly start paying off more and more of the mortage, which means your net mortage fee slowly increases over time, which is nice if you expect your income to increase over those decades.
One weird thing we have is that part of the interest you pay is tax deductible.
This matches the USA system for mortgages.
for this reason there is a type of mortage where you first only pay the interest, and slowly start paying off more and more of the mortage, which means your net mortage fee slowly increases over time, which is nice if you expect your income to increase over those decades.
This sounds new to me. In the USA we do have amortized mortgages so a very high percentage of the monthly payment is interest with little going to principal. Over time that relationship flips where you’re paying more principal that interest. However, in our system the mortgage payment stays the same, only how much of that fixed payment goes to interest vs principal changes.
Oh yeah the gross mortage payment stays the same. But over tme less of it is tax deuctible. Sounds like that system is the same across the countries.
Dutchie here, nope. We are paying both principal and interest. Plus when i to it out, my mortgage was 102% of my home’s value. And as it stands, the bank owns my ass exactly until I retire 🤷♂️
At least someone wants to pay for your ass. I can’t give this thing away.
I hear ass is pretty easy to give away. Much harder to get ass, especially if you’re choosy about the gender of the ass owner.
Not sure if this is what they were talking about, but balloon mortgages are a thing here too. I can’t ever imagine considering one, but they exist.
Balloon mortgages would be good in only two situations:
- you’re not planning on living in the house very long, so you likely exit before the balloon payments hit.
- you believe interest rates will decline in the next few years and you can refinance to a fixed low rate
I don’t ever see myself using a Balloon mortgage. Worse, they are frequently sold via predetory lending methods. Unsavvy buyers are convinced to take a balloon mortgage not understanding the payments will rise dramatically in the years ahead. This can lead to eventual foreclosure when the owners can service the higher payments.
If you’re not planning to live there long, I don’t think you shouldn’t be buying; that’s one of the few times I’d choose to rent. I guess maybe if home prices are rising then you can accrue some equity, but then you risk buying at the top of the market. I genuinely how it would compare to a fixed rate mortgage though.
If you think interest rates are going to decline, you can easily refinance a fixed rate mortgage as well. I don’t see any benefit in that scenario, but there’s a downside in that if rates don’t go down you still have that balloon payment to worry about, and if you don’t qualify for a traditional mortgage, you’re really in a bind.
Maybe if you’re flipping a house it makes sense, especially if you want to minimize cash outflow. Otherwise, there are so many more downsides that are much more severe than the mild upsides that you might gain. Perhaps there’s a few niche applications that I haven’t considered though.
How would that work, even on paper? Not being a dick, just don’t understand. So it’s literally just, “you can never own this property fully?”
UK has even worse, buy to let. Interest only with the intent of renting it out. So you profit on the rents and profit on the house going up in value. Obviously you vote for governments that will lead to an increase in house prices too. Oh yeah most of government is made up of
parasiteslandlords too.Sorry, my brain is struggling. How is this different from the U.S., for example? Isn’t it the same? If you buy, the only way to make money is to improve or rent out to someone even more desperate…?
Normally you also make payments towards the principal and build equity. As I understand, most of these buy to let loans actually only have you pay interest so you’ll never own the property. If the value even after 20 or 30 years drops below the initial value, you’re in the negative and need to pay up the difference if you can’t make payments anymore. Whereas with a normal mortgage once you’ve paid it off, fluctuating values can’t put you in severe financial trouble.
How would that work, even on paper? Not being a dick, just don’t understand. So it’s literally just, “you can never own this property fully?”
Yes. The tradeoff is you have a property that is in your name (with a bank note attached), and if the property increases in value during the time you own it, when you sell, you pocket the difference. If you have a fixed interest rate, it also caps the growth of your payment for housing for the entire time you live there. There’s quite a bit of value in that.
And then their kids keep paying until they die and still haven’t paid it off, even though they’ll have paid twice the original amount by that point. Whoever came up with this bullshit is probably right now buying their third yacht from the bonus.
30 year mortgage means you pay for the house twice with interest. 50 year mortgage means paying for the house 3x.
So basically you won’t own shit.
Never did.
Headline: Save 200 dollars a month with a 50 year mortgage over a 30 year!
Subtext: … and end up paying double the interest to us for the benefit, and die before your loan is paid off so we get to take the house back from your corpse, sell it on the cheap to a corporate real-estate investment firm (that we have stock in) for just enough to cover the remaining mortgage balance. They’ll turn your multi-generational family home into a shitty rental property or leave it empty to keep the rest of their rents high and your children get nothing cuz fuck em!
Anybody who believes a 50 year mortgage is a good idea, does not understand discount rates…
Discount rates are one of my favorite things. But pretend I’m one of those dumbasses who didn’t do the reading…? What would you say to really put those fuckers in their place!?
