Comment by wolvoleo
17 days ago
Here it's more normal to save up for something and then buy it. Rather than buying on credit and then paying it off.
It makes much more sense too.
The financial system is built to stimulate that. For example if you'd buy a house you need to pay about 30% in cash and you can't loan that money somewhere else. This way you get people that know how to deal with money. And also the bank doesn't run a big risk if there's a market slump.
This is not the only difference in the banking system; 25-year fixed-rate mortgages are also a feature that is rarely found elsewhere.
The minimum 10% deposit is mainly there to cover taxes, which cannot really be recovered by the bank in the event of default.
It's not a 10% deposit though, it's 30% (so 10% taxes and 20% investment in the house)
And the fixed-rate mortgages are a good thing (though only when the rate is low hehe)