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I mean super high rates lasted more than a decade, so if you add up all the interest paid, it was a horrible deal.
by refurb 4y ago
I mean super high rates lasted more than a decade, so if you add up all the interest paid, it was a horrible deal.
- jeffbee 4y agoSuper-high rates coincided with a low in the price-to-income ratio in the post-war era. It was > 6x in the 1950s, < 5x through the 80s, and now stands at > 8x. So why should I care if the bank took a higher share of a lower price? It was still a lower price.
- refurb 4y agoYou’d care because interest payments disappear while principle payments don’t. Back when interest rate were >6%, 80%+ of your first 5 years of payments went entirely to interest.