guru_wannabe
Registered User
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- 12
for the simplicity of this example (just to check the numbers) let's assume clean start, no rent, no debt, clean sheets.Q. What is the housing circumstance in the period before you having a mortgage? Are you paying rent?
Everything.What am I missing here?
I haven't calculated anything, I was using BOI calculators. Numbers are there to check the maths.Everything.
Just think about it for a minute.
How could it possibly make any sense to borrow at 6.8% instead of 3%, assuming you're making the same total repayment?
Now, look at what you're doing, and how you've calculated the interest amounts.
Have you thought about it? And the inputs you've used in the calculator? And how you've interpreted the results?I haven't calculated anything, I was using BOI calculators. Numbers are there to check the maths.
I'm looking at the total costs for 2 options and one is lower. Could you be more specific please?And how you've interpreted the results?
There aren't any repayments, I'm using the loan as a one-off payment at the beginning to reduce the principal.Your savings are from the accelerated repayments, not borrowing more expensively.
Of course there are.... you're planning to repay the loan surely?There aren't any repayments
Your interpretation here is incorrect. You've completely ignored the 23,515 of loan repayments that you need to make.So by using 20000 and paying 3515e for it, I'm saving 266160-239520=26640e on interest.
Scenario | Total Repayments | Total Interest |
1 | 266,206 | 66,206 |
2 | 263,234 | 63,234 |
3 | 259,723 | 59,723 |
Now you tell me! Thanks. I'm off for a pint (well, a can from the fridge at least)You don't need a calculator.
I'm saying it's B) and RedOnion's calculation shows it.Which do you think has the lower interest charges?
A) A loan of €200k @3%
B) A loan of €180k @3%
+
A loan of €20k @ 6.8%
You don't need a calculator.
It is actually that simple.
No it doesn't!!!RedOnion's calculation shows it.
according to your calculations:No it doesn't!!!
The interest savings are from making higher monthly repayments. NOT from paying a higher interest rate. The higher interest rate loses you over half of the interest savings.according to your calculations:
A) A loan of €200k @3% - total interest 66206
B) A loan of €180k @3%+A loan of €20k @ 6.8% - total interest 63234
B) is with lower interest charges
So taking the loan (every 5 years) still looks like the best (cheapest) option? What am I missing here?
It does go some way towards explaining why 'invest in gold' was a stock answer to every question for a while though...This thread is an amusing distraction from the Covid stuff. Mother of God...
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