I always like interest rate cuts

来源: 2008-10-19 15:41:01 [博客] [旧帖] [给我悄悄话] 本文已被阅读:

I have a fairly large HELOC and some flexible mortgages moving with the interest rate. Every time there is an interest cut, there is some money saved, or it can be considered as raised rent, tax cut, whatever. This month there is already a 0.5% cut, if there is another 0.25% cut next week, that is a total of 0.75% cut. For every $100K HELOC, that is $750 interest saved every year. Plus, that $750 can be used to pay down the same amount of principal, further reducing the interest that needs to be paid. So all in all, that feeds into a positive loop.

Also, interest rate cuts help the RE price, either by increasing price, or stabilizing price, or slowing price decrease. So equity will increase as a result, and the ability to increse HELOC at the end for more buying power.