Quote:
Originally Posted by Jedi Ninja
The main argument against the longer term prospects of the market relates to interest rates. Rates right now are as low as they will get. This has drawn a lot of people into the market. It has also altered the rent-vs-buy equation substantially. But the economics of buying a home on a 2.5% (variable) mortgage and a more normal rate of 6% are quite dramatic. The interest-only cost of a $400,000 mortgage goes from $10,000 per year to $24000.
The question is, how long can rates stay this low? I wish I had the answer myself. After Japan's property bubble collapsed in the '90s, the bank rate there stayed low for years. The same may happen here.
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It is still really low.
http://www.boj.or.jp/en/type/stat/dl...rate/prime.htm
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