Quote:
Originally Posted by LiquidTurbo
Would it be too much to ask for some rough calculations where you got the number of $900 mortgage interest?
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No problem, I'd be the first to admit I just threw the $900 out there on the top of my head. As most properties in Vancouver would probably be yielding that much in interest costs or higher.
But punching numbers that would give $900 a month in interest:
base on a $300,000 mortgage, at 30 year amortization, at say 3.6% (I understand you can get rates right now for much cheaper, but 3.6% gives you ~$900 a month interest costs).
Of course if you get rates at 3% it would bring that interest cost to ~$750 a month. Keep in mind historic rates have been around 5-6%, would be closer to $1250- $1300 a month in interest costs. And it would be higher the larger the loan.
Mortgage payment = interest + principal
Anybody can go to their banks website and play around with the calculators out there to give you an idea of what payments would be.
But doing the math out there even using best case scenarios, it really doesn't make sense at current prices. Only way it makes sense is if you think that properties will appreciate by 10-20% in the next few years, which based on stats and sales, is most likely not going to happen. (February sales numbers are 30% below 10 year averages).
Also for investors looking to flip properties, you have to factor in realtor commissions, property transfer tax, legal fees, mortgage discharge fees and maintenance costs too. It's not as easy anymore like the last 10 years in Greater Vancouver.. The market is slowing down in terms of sales, and inventory (supply) are at highs.