Quick Calculation …
Author: nicker
Category: Investor's Checklist
Some people were asking whether they should wait now that interest rates are rising, here are some quick calculations:
$625,000 house
20% down payment: $125,000
total mortgage: $500,000
30 year mortage rate 6.5%
Total payments: $1,137,722
Total interest: $637,722
$625k-10% price reduction= $562.5k
total mortgage-20% dn.pymt:$450k
30 year mortgage rate 7.5%
Total payments: $1,132,722
Total interest: $682,722
$625k-20% price reduction= $500k
total mortgage -20% dn.pymt: $400k
30 yr mortgage rate 7.5%
Total payments: $1,006,867
Total interest: $606,067
I think this shows it does pay to buy now even if the interest rate is better now if you see strong indicators prices are dropping…
investment property
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