Quote:
Originally Posted by MillerTime GFG
Those that lock in for 5 years at ~5-5.50% like we've seen over the past 6 months are in for a rude awakening should rates come back down and they want to switch to lower rates. IRD penalties are going to be through the roof. This will be the trend come 2024/2025 in my opinion.
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We've been in a (relatively) low interest rate environment for so long, I wonder how many people even know what an IRD is, or more likely, how high it can be if we see subsequent drops in posted rates.
We bought our first place in 2006/07, and it wasn't long after that when interest rates dropped. Yeah it sucked paying over 5% at the time when rates were much lower, but you take the good with the bad. I hope people understand that if they go fixed right now, that's probably what they are going to end up paying for better or worse as there'll be no backing out without a big IRD penalty.