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by afandian 978 days ago
A family member recently got a long term fixed low rate mortgage in Belgium and I’m curious about how different things are compared to the UK. UK mortgages are higher, shorter term.

Is the Belgian bank losing money compared to the UK one? Is there state intervention?
2 comments
michaelt 978 days ago
In the UK it's long been possible to get a kinda long term fixed rates - at least 10 years.

They just don't tend to sell very well - when interest rates are low [1], it's not particularly appealing to fix at 2.69% for 10 years when you could fix at 1.94% for 5 years or 1.25% for 2 years.

And coming off the back of two decades of rock bottom interest rates, a lot of people didn't anticipate that they'd be remortgaging at a >5% interest rate.

[1] https://web.archive.org/web/20170921064712/https://www.barcl...

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patd 978 days ago
There is no state intervention. Depending on market conditions, a 30 years fixed can have a higher rate than 25 years.

It’s basically hedged with long term bonds (Belgian or European) + a profit margin for the bank + risk based on your profile (age, health, employment history, …)

I guess UK banks are just hedging with shorter term bonds compared to Belgian ones.

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