How housing became the world’s biggest asset class

Re:How housing became the world’s biggest asset class by refurb on Wednesday January 22, 2020 @08:37PM (#22124021)

That's true for the US market, but what I learned is a "margin call" is a potential scenario in Canada.

Unlike the US, mortgages typically have 5 year terms (can range from 1 to 10). The amortization period is still 25 years (on average), but you refinance every 5 years.

If you put 20% down on a house, which then loses 10% of it's value, you can't refinance without coughing up enough cash to have the loan be 80% of the appraisal.

As you said, at least in the US you can choose to ride out a crash if you have a 30 year fixed mortgage.

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Re:How housing became the world’s biggest asset class by astura on Thursday January 23, 2020 @08:35AM (#22127378)

During the housing crisis in the US a lot of mortgages were ARMs, which are basically the same thing as your describing.

https://www.cbsnews.com/news/adjustable-rate-mortgages-make-...

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