{
  "id": 12923797,
  "title": "How Australian mortgages compare to the US, Japan and South Korea",
  "url": "https://urgent.news/2026/10/08/how-australian-mortgages-compare-to-the-us-japan-and-south-korea",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-08T18:00:00.000Z",
  "source": {
    "name": "ABC News AU",
    "slug": "abc-news-au",
    "url": "https://www.abc.net.au/news/2026-10-09/australian-mortgages-compare-united-states-japan-south-korea/107237648"
  },
  "original_language": "en",
  "account": "As interest rates began to climb earlier in the year, Andrew Clifford sought to safeguard his family from further financial strain. In March, he opted to switch his mortgage from a variable to a fixed rate for the next two years, before the Reserve Bank of Australia (RBA) raised the cash rate to its highest level in 15 years, from 4.35 per cent to 4.6 per cent. Clifford expressed relief at locking in his rate, but acknowledged that only those with mortgages bear the burden of battling inflation. He expressed a desire for a 25-year fixed-rate home loan, similar to those offered in the United States. Under fixed-rate mortgages, lenders charge a consistent interest rate throughout the entire mortgage term, while variable-rate mortgages allow for varying rates during the loan's duration. Most Australian homeowners possess variable-rate mortgages, with fewer than 5 per cent opting for fixed-rate mortgages, according to the RBA. Research suggests that Australians would benefit from longer fixed-rate home loans, akin to those in the US, South Korea, and European countries, where fixed-rate mortgages of 10 to 50 years are prevalent. In the US, government-sponsored entities such as Fannie Mae and Freddie Mac guarantee approximately 70 per cent of mortgages, reducing lender risk and making loans more affordable for consumers. A secondary debt market enables lenders to shift risk by selling mortgage-backed securities to investors like pension funds and insurance companies. These conditions facilitated the availability of 30-year fixed-rate mortgages in the US, according to University of NSW economist Richard Holden. However, Australia lacks such a system. Holden pointed out that such a move would prevent borrowers from reaping the benefits of falling interest rates, such as the period between 2015 and 2021 when interest rates declined significantly. While Japan offers most mortgages as fixed-rate for 35 years due to extremely low interest rates over the past 30 years, the Bank of Japan has since begun raising rates. In South Korea, most mortgages remain variable, but the disparity between fixed and variable loan rates is narrower. The smaller gap is attributed to investor demand in South Korea, influenced by a rental scheme called \"jeonse\" – a two-year lease agreement where tenants pay a substantial portion of the property's value, which is returned upon tenancy completion. This arrangement benefits landlords by providing interest-free funds and investors by increasing demand for competitive mortgage rates. To emulate the US's 30-year fixed-rate home loan system, Australia would need comprehensive market changes, which could be facilitated by government intervention. The South Korean government has historically encouraged fixed-rate mortgages by offering loans with terms as long as 35 years and implementing high capital gains taxes to discourage property flipping within short periods.",
  "summary": "With most Australian mortgages being variable loans and interest rates at a 15-year high, experts weigh in on different approaches to mortgages in other parts of the world.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "Capital FM Kenya",
        "title": "Kenya, South Korea celebrate six decades of partnership as ties deepen",
        "url": "https://urgent.news/2026/10/08/kenya-south-korea-celebrate-six-decades-of-partnership-as-ties-deepen",
        "published": "2026-10-08T14:19:25.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}