biophase
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I understand how interest rates work - that isn't my point.
The rate cannot be predicted. At the moment the rate is low as the UK government are trying to encourage spending. If this gets out of hand and we overspend the rate could go to anything. In the 1980's the rates went to 15% without warning and a lot of people lost there houses. So no - it can't be predicted.
The point I am trying to make is it it worth having a mortgage or save up cash and pay outright for the house.
or is a mortggage with 40% equity a suitable long term investment
Maybe you know how interests rates work. But you don't know how LOANS work.
If you notice, I didn't ask a single question about the actual rate. I asked you about your LOAN. If you don't know this stuff, you aren't financially literate and don't seem to want to learn. Everything I asked you for is in your loan documents.
Find out:
1) What percentage is added to the base rate to calculate your new rate
2) How often it adjusts, 6 months, 1 years?
3) If you have a cap on how far it can move on each adjustment
4) If you have a maximum and minimum cap on the rate
The reason you are asking your question is because you don't understand that ramifications of either option you are putting out there.
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