[_rebocador_]

> banks in the Netherlands to advise households to borrow as much as they can on a 30 year mortgage, never pay down the debt and put everything in the stock market.

You know banks are not in your side, with a unfixed rate that is just stupid to assume that in 30 years rates will always be low. That is why I payed 40 % of my house upfront, got a low 25 year debt with fix rate (it wasn't easy to find) negotiated now. I'm set for life, I'm paying 400 euros to the bank every month and I sleep well every night.

[tralarpa]

If the bank makes such an offer to you (how much was it? 1%?), doesn't it mean that the bank expects that the interest rate will stay low for the next 10 or 15 years?

[bluGill]

No, the bank has hedged everything. As soon as the bank issued your mortgage they sold a few bonds at the current interest rate, they collect your payments and pay off the bonds. The bond holders are betting that stay low, not the bank.

While in theory if rates go up you could find the bond for your house and buy it at a greatly reduced rate, thus paying much less for your house. In practice there is no individual bond for your house so you can't do this.