Quote:
Originally Posted by Kobatuzzied
You use your house as security and your rate is prime. Minimum payments are monthly and is just your interest. So right now prime is 6.25%. If you have a $250,000 LOC you would need to pay minimum $1302. You would need to pay more then that each month though,or you will never pay off your LOC.
It's more flexible because you can put more money towards it some months but for months like December then you might just want to pay the min.
If you went with the rate you gave above on the 5 year close you would be paying $1583/month
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Lets compare apples to apples - if you were to pay $1583/month on both types of debt, the traditional mortgage would cost you less...simple as that.