Interest Rates

[riaz]

Here in Luxembourg, I can see housing loans being offered at 3.2% but I can't tell if they are fixed long term, or variable with some sort of notice. If anyone is interested, I could find out. I suppose one could shop around, but as I am no longer in that market (mortgage nearly paid off, thank goodness), I am not following it avidly.

There also appears to be an option to elect a balloon payment, so you pay interest and principal on the normal portion, interest only on the balloon portion, and make a final payment. Loans are still being offered for up to 30 years, but of course it depends on your age. Normally, you are expected to pay off the loan at the latest by the time you are 57 - odd figure for some reason. So unless you are 27 or less, I doubt if you could get a 30 year loan, but hey, 29 or 28 would also do.

Long ago (and once again, of no interest to me as kids have flown the coop), you used to get a subsidy of 1% on your interest rate per child that you supported, so at one stage, I had an interest rate of 2.5%, less 2% for two kids, so I was effectively paying 0.5%, on which you could claim tax relief. I know the tax relief is still there (with a cap though), and some sort of child subsidy still exists, but I do not think it is a full 1% rebate any more.

 

[Long Nose]

Nice country Luxembourg, I've only been there once (1991). I drove my cousins Audi like the banshees from Strasbourg to the Autobahn and then through to Luxembourg.

Mind you, I was still spending most my time in the right hand lane and being passed by 911's most the way.

I like the child credit idea especially with three dependents. Did you experience the recent credit freeze?

 

[SydneyGeek]

In Australia, 6% is typical now. You can fix, but you can't pay early on fixed. You can get up to 30 years.
This is ballpark, there are heaps of exceptions.

Denis

 

[riaz]

Did you experience the recent credit freeze?

It is beginning to filter through now, not so much a credit freeze as people beginning to be careful with their money. About the only places where people are spending money seems to be supermarkets. We usually have an annual car festival in February and banks throw money at you to try and tempt you to buy cars. Well the festival is on, banks are throwing money at you, car dealers are knocking prices down like crazy, and still people seem to be reluctant.

I think the driving thought in most people's minds, finally, is that if you borrow, you have to pay it back one day.

 

[SydneyGeek]

I think the driving thought in most people's minds, finally, is that if you borrow, you have to pay it back one day.

...Which seems to have been one of the causes of the mortgage problems in the US. You don't have to pay it back if you default.

Denis