this post was submitted on 02 Oct 2024
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Mortgages can change repayments amounts as the central lending rate changes.
We’re in a squeeze in Canada right now because rates went up and a bunch of mortgages are up for renewal. (5-year fixed rate is standard here)
In Spain you can decode between fixed or variable rates, and although fixed rates are usually a bit higher, having the peace of mind that suddenly the mortgage won't raise next month and being able to plan around a fixed monthly cost is such a big peace of mind.
Fixed rates are the best.
Fixed rates are safer, for sure.
But during the pandemic, when rates went to near zero, I was very glad to be on a variable.
It went up a little, but nothing compared to the equivalent in rent you'd pay for the same place.
It's actually pretty comparable for me. My mortgage went up 40% which made the whole monthly cost of housing go up by 28%. Rents in the same building went up similarly but actually haven't quite caught up.
Not in the US if you have a fixed rate mortgage, and most do. There's tons of people who locked in rates at below 3% back in 2020-2021.