Rising home prices and interest rates have prompted more people to sign up for 30-year mortgages to ease monthly debt payments, Sinyi Realty Inc (信義房屋) said yesterday.
The average mortgage length climbed to a record-high 297 months, or 24.75 years, in the fourth quarter of last year, from 291 months in the previous quarter, indicating that 30-year mortgages have become mainstream, Sinyi Realty research manager Tseng Ching-der (曾敬德) said, citing data from the Ministry of Interior’s real-estate information platform.
That means that people who buy homes at age 40 would have to pay mortgages until they turn 70, Tseng said.
Photo: CNA
Older Taiwanese liked to pay mortgages ahead of schedule to save on interest payments, but people today prefer to take advantage of Taiwan’s low interest-rate environment and extend mortgages to own a home, the analyst said.
Interest rates on mortgages were about 1.3 percent for a long time before the central bank started to tighten its monetary policy in March last year to contain inflation, Sinyi said.
Twenty-year mortgages used to be the home loan of choice and many borrowers paid way in advance, consistent with Taiwan’s high savings rates, Tseng said.
The new mindset is especially evident among young buyers of new homes in New Taipei City, Taichung and Hsinchu City, where mortgages average more than 300 months, he said.
Newly completed homes have favorable lending terms with assistance from property development companies, he said, adding that young people consider 30-year mortgages acceptable.
Rising home prices make 30-year mortgages more attractive, as they require lower monthly payments, Tseng said.
The monthly payment for a NT$10 million (US$324,538) 30-year mortgage with an interest rate of 2.06 percent is NT$37,263, much less than NT$50,873 per month for a 20-year mortgage, he said.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
RSS