global real estate

Here’s Why the US is One of the Only Countries with a 30-Year Fixed-Rate Mortgage

27 May, 2024

Interest rates and real estate go hand-in-hand. Currently, the average 30-year fixed-rate mortgage is around 7%. Most Americans who buy a home choose to use a 30-year fixed-rate mortgage. But what do people in other countries do when they buy a home?

It’s easy to think everyone has the same type of mortgaging systems in place globally, but there are definite differences. In America, the 30-year fixed-rate mortgage is extremely popular. In fact, about 90% of homebuyers use this type of loan to secure their property because it lowers their monthly payment and gives them flexibility.

The 30-year fixed-rate mortgage in the US

According to, “A 30-year fixed-rate mortgage is a home loan that has the same interest rate for the entire 30 years of repayment. It offers the security of a consistent monthly payment and the flexibility to afford a larger loan amount. The monthly payment depends on the loan amount, the interest rate, and the down payment.”

Thanks to US government policy, this type of loan is now in place. In 1948 Congress authorized the 30-year fixed-rate mortgage for new construction. Then in 1954 they allowed it for existing homes. This type of loan quickly became the norm across the nation because it lets home buyers enjoy the benefits of both fixed-rate and long-term loans. So, how do other countries across the globe handle their mortgage loans?

Mortgages in Canada

Canada does not have a 30-year fixed-rate mortgage, but rather a 5-year fixed-rate that is paid off over 25 years and refinanced around every 5 years.

According to Statistics Canada, “Fixed-rate mortgages are the most commonly chosen mortgage type in Canada, both because they’re stable and because Canada’s major banks tend to offer some of their best fixed rates on five-year terms. There was a period during the COVID-19 pandemic when low variable rates caused their popularity to spike, but once variables began their rapid rise in March of 2022, home buyers gravitated back to the certainty offered by fixed rates. In January 2023, fixed-rate mortgages made up 69% of mortgage funds issued, more than double the amount issued in January 2022.”

Mortgages in the UK

According to, there are four main types of mortgages in the UK. They are:

  • Interest-only mortgage
  • Repayment mortgage
  • Fixed-rate mortgage
  • Variable-rate mortgage

In comparison to the US, we will look at their fixed-rate option. In the UK, the fixed-rate mortgage is also known as the introductory rate. If a homeowner sells their home during that introductory rate time they will have to pay exit fees. The fixed-rate period, or initial-rate period, is for 2, 3 or 5 years. Once the initial-rate period ends, homeowners get switched to the standard-rate. This is often a higher interest rate, so many people refinance.

Mortgages in Japan

In Japan, the most popular type of mortgage are combined interest rate loans. This means a home buyer will start out with an initial 5-, 7- or 10-year fix-rate period, then a variable rate for the remainder of the term of the loan (another 20-30 years). The borrowers have the option to fix their rate at the variable rate for the remainder of the term.

Homebuying and mortgage support across the globe

Let’s face it, it’s a big world. And there are a lot of people that want to buy a home in it. So many countries, like the US, have government support for purchasing homes. For instance, in Korea there is a government-sponsored mortgage enterprise like Fannie Mae and Freddie Mac, called Korean Housing Finance Corporation that works to set up programs for borrowers to benefit from.

The bottom-line is that we may all have different mortgage systems, but the majority of homebuyers across the globe are still financing to purchase their homes. Here in the US, it’s so important to work with a trusted lender who understands the ins-and-outs of real estate industry and how to help you secure the best loan possible to meet your unique needs.

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