[hn_throwaway_99]

My argument is that zero-percent down loans will always end badly, because if you don't have the discipline to pull together even a measly 5%, you don't have the discipline required for home-ownership. And it's not like banks can charge payday-loan like rates on a mortgage, because if you can't afford a small down payment you also can't afford high monthly rates.

These types of loans always increase when credit is cheap, and then they end badly (sometimes very badly) when the economy eventually turns.

[SilasX]

Those are good points (and I said something similar in my cousin comment), but you're overstating it by saying they always end badly. Obviously, some percentage of such mortgages are paid back. (I'd agree if you meant they go bad at the macroeconomic level, but you specifically clarified that you were referring to the individual who can't make a down payment and saying they will also fail to pay it back.)

[hn_throwaway_99]

Yes, you are correct, I'm not arguing every single mortgage will end in default, but that every macro environment where zero down mortgages proliferate will always end in tears to whoever is left holding the bag (currently homeowners and investors, and, crucially, rarely loan originators).

Of course, to my knowledge, the only environment where zero down mortgages were really widespread was the mid-aughts housing bubble, but even with an n of 1 I still think it's a bad omen.