Han Kuo-yu’s administration has announced a program to help young adults buy their first home in Kaohsiung. The program lets first-time buyers take out low-interest long-term mortgages lasting up to 40 years. It looks good at first glance, but real-estate experts urge caution, saying that buyers will pay more interest over a longer term. The Han administration in Kaohsiung has launched a scheme to help young first-time buyers purchase a home. The city is offering 40-year mortgages with interest rates as low as 1.6%. But experts say that over 40 years, a mortgage of NT$4 million would rack up interest twice the amount of a 20-year mortgage. They also say that long-term mortgages come with additional risks.Jessica HsuReal estate agentFor a long-term mortgage, the biggest risk is if interest rates go up while you’re paying the loan back. If you don’t have sufficient savings, you might not be able to return the loan, and then your house could get auctioned off.Experts say that extending the payment period doesn’t resolve the core problem.Jessica HsuReal estate agentThe biggest problem isn’t the monthly payments. It’s actually whether the buyers can afford the down payment and the high property prices.Member of the publicI’d want to pay it back in 20 years because I’m relatively comfortable financially. I could put that money to other uses in the future.Most say they would rather pay off their mortgages as early as possible. Experts say that Han’s scheme could actually create more problems for borrowers than it solves.
Han Kuo-yu’s administration has announced a program to help young adults buy their first home in Kaohsiung. The program lets first-time buyers take out low-interest long-term mortgages lasting up to 40 years. It looks good at first glance, but real-estate experts urge caution, saying that buyers will pay more interest over a longer term. The Han administration in Kaohsiung has launched a scheme to help young first-time buyers purchase a home. The city is offering 40-year mortgages with interest rates as low as 1.6%. But experts say that over 40 years, a mortgage of NT$4 million would rack up interest twice the amount of a 20-year mortgage. They also say that long-term mortgages come with additional risks.Jessica HsuReal estate agentFor a long-term mortgage, the biggest risk is if interest rates go up while you’re paying the loan back. If you don’t have sufficient savings, you might not be able to return the loan, and then your house could get auctioned off.Experts say that extending the payment period doesn’t resolve the core problem.Jessica HsuReal estate agentThe biggest problem isn’t the monthly payments. It’s actually whether the buyers can afford the down payment and the high property prices.Member of the publicI’d want to pay it back in 20 years because I’m relatively comfortable financially. I could put that money to other uses in the future.Most say they would rather pay off their mortgages as early as possible. Experts say that Han’s scheme could actually create more problems for borrowers than it solves.
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