Australian Banks Kicking Themselves For Not Thinking Of 50 Year Mortgages First

EFFIE BATEMAN | Lifestyle | Contact

As US president Donald Trump announces American citizens will soon be able to take out 50 year mortgages, Australian banks are reportedly kicking themselves for not thinking of it first.

Under the new plan, aspiring homeowners would see their monthly mortgage repayments drop dramatically -  though the total interest paid over time would nearly double, making it a clear win for the banks.

Essentially, homeowners would be renting from the bank until they die but without the only perk of renting: having someone else responsible for maintenance.

Though perhaps if the homeowner has children, they can then inherit the remaining portion of the mortgage.

The big four Australian banks are reportedly wishing the government had opted for a 50-year mortgage proposal instead of the 5% deposit scheme, as though both are great for banks and disastrous for the housing market, the lifelong mortgage would have been the real jackpot.

This comes as leaders of housing crisis ridden nations scramble to look like they’re doing something about affordability while continuing to inflate property prices.

In its October review, the Reserve Bank of Australia noted that investor borrowing is now growing faster than lending to owner occupiers, likely due to the 5% deposit scheme spooking investors into fearing an incoming price correction.

It's alleged the banks are now in talks with the government to consider making 50 year mortgages a thing here, should their yearly profits start dropping below $2 billion.

More to come.