Interest rate increase wrong time to buy?

ollyshaw

Kuztardd wrote:

edit: doh..just realised this doesnt take into account interest on a big mortgage..

Beat me to it! Amazes me how many people forget that you have to pay interest on a mortgage, oh and the upkeep and insurance on your home!

Olly

MickKnipfler

ollyshaw wrote:

Beat me to it! Amazes me how many people forget that you have to pay interest on a mortgage, oh and the upkeep and insurance on your home!

Olly

It amazes me how many people forget anout paying off the CAPITAL!

The mentality seems these days to be:

1. Can I afford the monthly interest payment
2. If the value of my inversment doubles every six months, I can eventually pay off the loan by forgoing a bottle of champagne

talksalot81

ollyshaw wrote:

Really, surely they have to make sure that they get the money back?

This would be my logical view on the matter. To increase lending in the belief that a crash is coming is basically giving money away. Only if they truly believed they could 'head off' a crash would they increase lending. If they are now seeing a possible crash, they should also see that this is inspite of increased lending and should logically see that it hasnt worked so far. It is flawed logic to assume that going further would actually stop a crash rather than delay it.