Corelation between long term bond yield and Mortgage rate

@Redom and every one else

what is the correlation between Australian Mortgage rates, 10 yr Au bond yields and 10/30 yr us bond yields.

Why we don't have cheap 30 yr fixed rate home loans like US does?

How much of our bank home loan books reliant of foreign funding (us$)?

 

You answered the question yourself '30 year fixed'

 

US market is different from us, your PPOR is actually tax deductible so most people just have it fix for 30 years and get the deduction, because there is a market for it...and chuck all the money in the stock market and get tax benefits

that one of the reasons the US stock market is so huge and have extreme boom and bust cycles.. so In Australia you tilt toward properties investment for most people, in the US it the stock market, that why house price in US will never go anywhere near our record high most people invest in the stock market even with boom and bust cycles.

All the news cycles and investment talk, chat forum are mostly stock market

 

http://www.singingmortgageguy.com/include/singingmortgage.mp3

The Singing Mortgage Guy

 

So is it only the property rules that are different, or are the share rules (costs, taxes, divs, etc) different too?

 

Yes they have very favourable long-term capital gain (10%-25%) and dividend are a double tax not like here with franking credit, so most US company don't pay much dividends, keep all the cash for expansion and all gain mostly made from capital gain in the stock market.

So in US, the US stock market is the way to go, the same rule applied to properties for capital gain but holding cost and hassle and of getting in and out people prefer stock market in the US, some state the cost of holding properties is outrageous that when people retire they can't even afford the tax and force to down size.

You can get rich very quick with the stock market in the US if you happen to pick a few good company as the capital gain is exceptional and the PE multiple expansion you will never ever see in the market like Australia, 10, 20, 50, 100 times return are not that uncommon and that another reason they all draw to the stock market.

So yes the rules are favour for stock market in the US, you can look at the US house market boom before it bust are engineer of the stock market, those companies make money big times just before the collapse of the housing.

so if you happen to cash out before the crash, 20-50 times your money on the market relating to those housing boom engineering