Bracing against the 40-year mortgage
While repaying the home loan has long been considered a necessary evil, today’s homeowners may find themselves stuck with it for far longer.
Such is the warning of the Australian, which has pointed out that while many people used to be able to clear their home loan debts inside 15 years, nowadays people are looking at 30 or 40-year home loan durations.
Money expert Morris Kaplan explained that the length of repayments has been upped by people opting for what he called “lazy” lines of credit, which “enable us to turn on the tap and accumulate more debt, but in a cosy sort of way”.
He added that these kind of schemes – such as home equity release deals – have been present in the US for a long time, something which should “scare the pants off us”.
In an effort to shorten the home loan repayment burden, the Australian recently advised consumers to make sure they spend wisely, urging people to forgo a few luxuries and plough the money into paying off the mortgage.