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The error in your logic is assuming the bank is going to want the same % down payment for a 2% and a 10% mortgage.
by ng12 7y ago
The error in your logic is assuming the bank is going to want the same % down payment for a 2% and a 10% mortgage.
- verbify 7y agoA down payment is usually a percentage of the value of the house (typically 10-20%). If the house is worth more, the down payment is higher. As I said before "effectively people who have bought before can buy another house, while those who haven't can't". A higher downpayment is yet another barrier. However those who have houses already can use their existing previous equity as a downpayment and therefore can sell their home and buy another. This underscores the view I was promoting - that interest rates play a large part in the difficulties besetting new buyers.