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That's an excellent loan isn't it. A home loan usually ends up in twice the price being paid back over the length of the loan.
by sosuke 11y ago
That's an excellent loan isn't it. A home loan usually ends up in twice the price being paid back over the length of the loan.
- praxulus 11y agoA home loan is also paid back over 15 to 30 years. The bailout loans were paid back in under 5 years. Are you familiar with the "time value of money"?
- sosuke 11y agoYou're right, at 5 years only a billion dollars of interest would have accrued with 4% interest.
- dangrossman 11y agoA home loan would've generated 3-4% in interest a year. The US government made over 14% in less than a year on this loan. That would make it terrible, not excellent, for the borrower -- more akin to a high interest credit card than a mortgage. Mortgages involve paying so much back because you have interest compounding on a large balance for 15-30 years.
- IkmoIkmo 11y agoActually this wasn't a terrible rate for GS, it was a great rate. And it can't simply be compared to a mortgage.
- deelowe 11y agoHome loans are for 10,15, or 30 years unless you're comparing ARMs. In any case, there's no comparison here. The government made 15% on a 5 year loan. That's terrible for GS and great for the government. A better comparison would be an auto loan which has a comparable time value. I don't know of any auto loan which comes close to that (15% after 5 years).