For example, let’s say you bought a $300,000 apartment and took a $270,000 mortgage at 3.55%, i.e. BLR-2.0% stretched over 30 years. If you just paid the minimum installment payments every month, how much would you have paid in total interest? The answer: Using a financial calculator, you can see that you will pay $1,220 in monthly installments for 30 years. That’s a total of $439,200 in installment payments! You would have paid a total of 169,200 in interest to the bank. If interest rate increases to 5.3%, that’s like buying two apartments and giving the bank one! Useful Mortgage Calculator with Amortization Graph, Repayment Chart & Balance Graph for better visualization http://www.mortgagecalculator.org |
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Dude, we have arrived a time called massive inflation. The cash money that we hold reflects lesser value. Groceries, sundry goods, household items, food all asking for a higher price. Lets say the 2010 lending rate is 4%. Do you think that inflation for 2010 is lesser than 4%? Even if I am cash rich, I would think getting a loan from the bank worth more. Loan is a privilege that only a person who is financially sound and good credit history gets it. |
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