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Interest rates Vs Price Drops
setmefree2
Posts: 9,072 Forumite
Can someone check my figures please?
Happy to be proven wrong but if £100,000k costs the following over 25 years:-
7%, £212,034(£18,744 more than at 6%)
6%, £193,290 (£17,913 more than at 5%)
5%, £175,377
then
£100, 000 @ 5% costs £175, 377 (£1.75377 * £100,000)
£90,732 @ 6% costs £175,377 (£1.9329 * £90,732)
£82,713 @ 7% costs £175,377 (£1.75377 * £82,713)
Therefore,
Prices have to drop 9%, then 8% to be equal to the cost of £100k at 5%.
Thus, when interest rates move 1% the market has to drop 9% for things to be the same and 17% for a 2% rise.
Happy to be proven wrong
SMF2
Happy to be proven wrong but if £100,000k costs the following over 25 years:-
7%, £212,034(£18,744 more than at 6%)
6%, £193,290 (£17,913 more than at 5%)
5%, £175,377
then
£100, 000 @ 5% costs £175, 377 (£1.75377 * £100,000)
£90,732 @ 6% costs £175,377 (£1.9329 * £90,732)
£82,713 @ 7% costs £175,377 (£1.75377 * £82,713)
Therefore,
Prices have to drop 9%, then 8% to be equal to the cost of £100k at 5%.
Thus, when interest rates move 1% the market has to drop 9% for things to be the same and 17% for a 2% rise.
Happy to be proven wrong
SMF2
0
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