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by JackFr
1517 days ago
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> Going into debt at the lowest interest rate you'll ever be offered to buy a leveraged asset that's likely to increase in price To a large extent house prices are sensitive to interest rates. A bank will look to your income and say you can make a monthly payment of $X. At historically low interest rates that’s gonna mean a bigger loan. As everyone’s ability to borrow goes up, so do the prices. As rates rise, for the $X dollar payment, the ability to borrow declines, and that puts a down draft on house prices. |
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