If you’re paying off a mortgage on a property in Ceredigion, Pembrokeshire or Carmarthenshire, you’ll be well aware of how the mortgage market works in the UK.

But how do they do things in the rest of the world?

Let’s look at how people in other countries get on the housing ladder.

The Netherlands

While UK lenders offer the choice of a fixed-rate or variable mortgage, the Dutch do things differently.

A Dutch-style mortgage is a long-term deal (typically 20 to 30 years) in which the interest rate automatically decreases as the loan is paid down.

This means the Dutch don’t waste time and money re-mortgaging every couple of years to get a better deal reflecting their situation; their mortgage adjusts progressively to reflect their improved loan-to-value ratio.

You may also be interested to note that in the Netherlands, the interest you pay on the mortgage of your main residence is tax deductible.

The US

If you want mortgage certainty, you’ll find it in the US, where 15, 20 and 30-year fixed rate deals are the norm.

However, securing such a deal is tougher now than 15 years ago, as regulators tightened the lending rules after the 2008 financial crisis (which was partly caused by irresponsible mortgage lending).

It’s hard to believe, but in the early 2000s, ‘no-doc’ mortgages were readily available. Many Americans could get a mortgage without documenting that they could meet the repayments (the loans were known as NINJAs – no income, no job or assets).

As history shows, lending huge sums of money to people without verifying their ability to pay it back didn’t work out well for US banks or the rest of the financial system.

South Africa

First-time buyers struggling to get a deposit together in the UK should spare a thought for South Africans. Most SA lenders will only greenlight a mortgage if customers have a 50% deposit or a property they put forward as collateral.

In SA, fixed-rate mortgages are much less common than in the UK; most mortgages are on variable rates.

If you’re looking to take your first step on the housing ladder or move to somewhere new, contact us today.