Low-interest, very long-term mortgages "would be great from the consumer's perspective", according to one fund manager.A Labor MP has raised the idea that major Australian banks should offer affordable 20-year home loans.
But Labor MP Tania Lawrence argued the accounts were only popular because other types of loans, which might be more popular, were not available.AAP: Mick Tsikas"Because I often do hear the response being … 'We don't have more options around long-term 10-year to 15-, 20- to 35-year options for mortgage-length terms … because consumers want or like having the variability of the interest rate,'" she said.
"And so what that means is, structurally, banks are unable to have long-duration loans because you would have a mismatch against your deposits.""It's when there's a mismatch between the duration of their assets and liabilities."This is why the bank offers fixed mortgages for two to three years.The NAB boss chose to "hypothesise" what that would look like.Photo shows A bald man wearing a black shirt holds a surfboard in the front yard of a brick house.
"So it makes sense for these long-term providers of capital to potentially work with us in the system to provide long-term mortgage instruments.United States lenders draw on annuities in the insurance sector rather than capital in the superannuation or pension funds sector. She also noted that the superannuation industry was already an activity supplier of finance to companies that supplied housing.