Mortgages Across the Globe

At Quicken Loans, we often talk about how US mortgage rates are the lowest they've been for our country in decades. This has had me wondering about mortgages industry in other nations. After a little investigating, I came up with some interesting facts worthy of sharing with our readers.

Mortgages in the UK

In the UK, the practice of mortgage a home is very similar to the US, however, it's far more common to have a "flexible" rate in the UK - what we refer to as "adjustable." In fact, people in the UK are surprised to learn that in the US a fixed rate mortgages is the norm!

Also, initial deposits are often less for purchasing a property in the UK. And the US idea of paying "points" to buy down a mortgages rate is unheard of!

Mortgages in Australia

Just like the UK, the adjustable rate mortgage is far more common in Australia. Typically, a rate is fixed for five years, and after that time readjusts to the market rate.

Also, Australian banks are not as flexible with paying off a loan early. While it's possible to pay the loan earlier than the length of the full term, a borrower still must owe the bank the full interest as if the loan were carried to term!

Mortgages in Japan

In Japan, like the US, residential mortgages rate are mostly fixed, though there has recently been more of a push to offer adjustable rate products because of the prolonged low rate interest environment their economy has experienced.

Japan has had its own housing crisis, resulting in a considerable drop in land and home prices. Their mortgage market problems are blamed for their lagging economy, and looked to by the US as an example to try to keep our own economy from stagnating to the same degree

Mortgages in South Korea

In South Korea, mortgages are very common. There are even mortgages for renting, as some landlords require up to 80% upfront of the cost to rent a property (usually for two years) as part of a nationwide practice known as jeonsei. Terms for a mortgage in South Korea are from 5 to 20 years, and down payments for new homes are much higher than those required in the US.

Mortgages in Canada

In Canada, it's much more common to have an adjustable rate term than a fixed rate. The term is typically fixed for five years, and the rate can adjust to market rate at the end of that period.

Just as in the US, Canadian home purchases typically require a 20 percent down payment. Though it's possible to buy a home for a payment lower than 20 percent with the purchase of mortgage loan insurance.

In Canada, if a borrower defaults on mortgage payments, banks can seize the borrowers other assets, such as savings accounts and cars. The US has more restrictions on what lenders can take in the event of a default.



By: Rebecca Carter
Know of any other mortgage practices from around the world? Let us know! We'd love to know more!

Rebecca Carter is a writer with Quicken Loans who specializes in articles about Home Mortgage and other home-buying related information. https://www.quickenloans.com/