I’m from the U.S., so I’m used to the standard 30-year fixed mortgage or ARMs with X number of years fixed before transitioning to adjustable, but I see mentions in other chats about options for completely fixed along with adjustable mortgages available in Taiwan.
All my Taiwanese coworkers and friends say they do not know about completely fixed mortgage rates for the lifetime of the loan, and they say they’re all adjustable. I’ve seen topics that occasionally discuss a bit about this, but I’d like to consolidate the info a bit.
Is there any resource (even in Chinese) that I could get a solid answer?
What are your experiences after talking with banks?
Thanks, but there’s not really much additional information in there. Just kinda states what I already stated in the first post. I heard banks are reluctant to give 30-year fixed rate mortgages in Taiwan. I like gathering as much information as I can beforehand on subjects before actually going in and talking with people. Similar to car shopping. Never go to a dealer without knowing how they make their money, make sure you know all you available options ahead of time, and know what questions to ask. Unfortunately, people who lend money are not trying to do what’s best for you, as we all know.
It’s all about your needs. People aren’t lending you money for free, they expect to make something off of it. The question is, is the cost worth it?
Like for example big stuff like cars and houses you can’t exactly just go pay cash for it, so you got no choice but mortgage.
For credit card it’s a little easier, but say you’re willing to pay about 5% extra so you don’t have to pay for it all at once (because you never know when a lump of cash can be useful). And I don’t mean just pay less than full payment and do a DIY installment plan. This is bad for credit and the interest rate is horrible. Instead (at least in Taiwan) you set an installment plan either for the entire bill, or for individual transactions more than 1000nt. Interest is known up front and you won’t wreck your credit.
I’ve found it’s really not all that easy to find information about stuff on the internet in Taiwan though. Internet articles say a lot without actually saying anything (meaning I’m left scratching my head reading it), and at the end of the day it’s the banks giving you the loans, not those websites, so what the bank tells you, or offers you is what counts.
I’m totally with you on information on the internet in Taiwan. I’m so used to everything being easy to find in the U.S. I feel it’s near impossible to put in a question to Google and get a straight answer with the information you’re looking for unless I’m just totally going about it the wrong way.
I’ll probably have to go in and talk to multiple banks, but I’d still like to see if anyone on here has experience with having a full fixed rate offer or any other mortgage offers they’ve seen.
I heard from my local friend that banks used to offer fixed rates a long time ago, but don’t anymore. It depends on the market conditions. I believe this was back when rates were very high, in the low 10%s.
Currently with rates very low pre election, possibly heading higher post election, and lower than most other countries, banks may not want to take on the risk.
I’m so stuck in the American mindset of locking in an interest rate and knowing what my payments will be. It’s hard for me to convince myself that interest rates won’t increase in the long term here especially since they’re so low now. It would be nice to have a 5-7 year fixed for the first years, but it sounds like that’s not possible here.
It would be very bad politically to increase rates too much. Many in Taiwan live paycheck to paycheck because they put all disposable income into paying off their mortgage and think the government couldn’t possibly raise rates too much. I think this is why they don’t hike rates too much pre election.
They would have to in the case of high inflation, which would (I believe) absolutely destroy the housing market. That’s why the government is trying to keep rates so low. Normal people likely can’t afford homes if the interest rates go up by 1-2% here. Just with the tiny interest rate increase recently and additional tax for people with multiple homes, increase in home prices YoY has plummeted in 2023. 10-15% increases each year weren’t sustainable anyways.
Actually how is it that the price to buy the property is so high compared to their rent?
Like say you find a property that rents for maybe 12,000 a month in Xinjhuan. That same property if it’s on the market goes for over 15 million. If you paid mortgage you’d pay half up front, and your payment is still higher than rent. The only advantage I see to owning is that you can’t be kicked out if the landlord decides to sell it or something.
(I don’t know if this is off topic, so if it is please move it to the “cult of real estate” thread).
A little off topic, but that’s ok. I think decreased rents are mostly due to supply, demand, speculation, low interest rates, low taxes, and the Taiwanese mindset on owning a home and “theowi g away money when renting”. Most people would rather live with their parents until they have enough money to scrape by paying a very expensive mortgage each month than rent. Living with parents is already part of the culture, and so is home ownership. This creates lower demand and increased demand for buying.
The “cult” of home ownership keeps driving prices hire because people invest their and their parent’s money into homes instead of businesses (like most of the rest of the world). They think a house always returns 10%+ each year forever.
There’s good correlation (generally) between interest rates and the year over year house price increases with housing. Lower interest rates means less return on safer assets, so people will put their money elsewhere.
People can correct me on any of these, but this is what I’ve seen and my experience talking with people. All these things are driving the gap between a mortgage and rent.
What I don’t understand is how there’s such a high vacancy rate in Taiwan and how people can afford the payments, but I’m guessing the people who have multiple homes have lots of money or have found some scheme to take advantage of low rates that will eventually blow up when rates rise.
I am on the same boat. I the USA there are so many more options of financing, including fix rates. So far I have only learn that variable rates are the only options offered in Taiwan. Frankly speaking that is one of the main reasons that hold me back. Because as stable the interest rates have been in the last 13 years, globally everything looks to be chaos. I am not smart enough to know if external financial problems can affect interest rates here in the future.
Yeah exactly. It’s impossible to predict what will happen to interest rates in the future for any country. Any shock could have huge impacts to any country’s economy and result in changing interest rates. Adjustable rate mortgages make me super uncomfortable. The only way I would be partially ok with it is if I pay a lot more in the beginning to offset any potential increase in the future, but that assumes I can afford paying a significant amount extra each month.
Just to let you guys know, it’s possible to buy property with just 10% down now. Almost all banks are offering 80% mortgages for first time buyers, and they’ll give you an extra 10% of the value of the property as a redecoration loan. You might need to show that you did actually renovate after a year or so, but if you can do a lot of that renovation yourself then you aren’t realistically gonna need to spend 10% value of the property. The interest rate on the 10% redecoration loan might also be higher, but still ridiculously low compared to Europe or the US.
