I am just thinking if now is right time to buy IPs while the int rates are low ?
Let say you buy a number of IPs at low fixed rates now.
Assuming the 5 yr fixed rate (6.3%) is used.
Year 1: 6.3%
Year 2: 6.3%
Year 3: 6.3%
Year 4: 6.3%
Year 5: 6.3%
Total :31.5%
Assuming the variable rate for next 5 years will be creeping up:
Year 1: 6.5%
Year 2: 7.5%
Year 3: 8.5%
Year 4: 9.5%
Year 5:10.5%
Total :42.5%
It will cost you (42.5 - 31.5) 11% interest more on your investment with variable rate.
If your portfolio has 1 million loan amount, it will cost you 100k more during 5 years using the variable rate.
What do people think about the property prices in next 5 years ?
(Up or Down or Same)
I presume most people will say Up?
In that case, don't you think you should buy IPs at low fixed rate now ?
People waiting for property prices to come down.
The more they wait, the more it will cost them more.
Let say you buy a number of IPs at low fixed rates now.
Assuming the 5 yr fixed rate (6.3%) is used.
Year 1: 6.3%
Year 2: 6.3%
Year 3: 6.3%
Year 4: 6.3%
Year 5: 6.3%
Total :31.5%
Assuming the variable rate for next 5 years will be creeping up:
Year 1: 6.5%
Year 2: 7.5%
Year 3: 8.5%
Year 4: 9.5%
Year 5:10.5%
Total :42.5%
It will cost you (42.5 - 31.5) 11% interest more on your investment with variable rate.
If your portfolio has 1 million loan amount, it will cost you 100k more during 5 years using the variable rate.
What do people think about the property prices in next 5 years ?
(Up or Down or Same)
I presume most people will say Up?
In that case, don't you think you should buy IPs at low fixed rate now ?
People waiting for property prices to come down.
The more they wait, the more it will cost them more.