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One thing I think people overlook is that there's a hidden cost to buying at low interest rates: if rates go up that will eat into your resale value, and it's l
by patrickthebold 5y ago
One thing I think people overlook is that there's a hidden cost to buying at low interest rates: if rates go up that will eat into your resale value, and it's less likely you can refinance at a lower rate in the future.
If you bought at a high interest rate and then rates drop you really make out, and that's less likely to happen to people buying now.
- deleted 5y ago[deleted]
- cudgy 5y agoAlso, artificial low rates are causing increased inflation of prices, which means cash buyers and buyers that would pay off their mortgage quicker are at a disadvantage.
- milkytron 5y ago> artificial low rates What do you mean by artificial here?
- cudgy 5y agoFor example, Interest rates are so low that the traditional alternatives of stock investments are no longer present. Traditionally, a bond would include a rate that is beyond inflation. Nowadays, government bonds return rates below inflation. This is artificially low and creates a bubble in the stock market (and other assets like real estate) since the traditional option to put money in bonds has been artificially devalued.
- danuker 5y agoRates depressed by the central bank buying everything deemed "safe". Very few "natural" investors (as opposed to "artificial" central banks) would accept a 0.25% yearly return on their capital. https://tradingeconomics.com/united-states/interest-rate https://tradingeconomics.com/united-states/interest-rate