how do people own homes in countries where the mortgage doesn’t exist?
In: Economics
In my country, the mortgage industry is so nascent that only about 1% of the population buys a house through mortgage. Instead, there are a couple of other ways:
1. They rent their entire lives and use the end of service packages (Provident Fund, Gratuity Fund etc.) to buy a house.
2. They save for 5-6 years and use the money as a deposit for a new housing society in the suburbs. The remaining amount is paid as a monthly instalment. This is typically cheaper than a mortgage as the house prices are low due to being an new development.
3. The above two lead to inheritance for the next generation, who typically sell the inherited property to buy a house / condo in the city.
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