GrainGrower37 - 1/11/2026 20:46
Reality speaks - 1/11/2026 21:28
It's a choice,
If your personal cash flow is that the debt is liquidated in 10 years then locking in for 5 years might make sense as any interest change after the 5 years could easily be managed with adjustments (which most lenders would agree too) such a making the amortization longer than originally agreed too.
If its actually going to take the full amortization to repay why take on the interest rate risk?
Have a deal with no prepayment penalty. If your right and interest rates drop dramatically refi. If not your protected from those higher interest rates.
There is rarely a single answer that fits everyone's situation.
You've stated many of our thoughts here.
Right now, we're likely looking at taking 25-30 years of the 30 year term to pay off this loan, so functionally we're using the whole amortization schedule.
All of my discussions and readings are that rates are predicted to be slightly down to flat in the next 24 months. I'm inclined to try and save some interest expense for a year or two, and then lock in a 30 year fixed at or near 6%, and then stop worrying about it, until and/or if rates continue to drop from there.
The risk of locking in the 30 year rate now is spending more on interest now. It can be refi'd anytime after 1 year. The risk of doing the 5/30 year is never getting the opportunity to lock in a longer term interest rate that is better than 6.85% available today, but paying less interest now, and spending more on interest later.
If it takes 25-30 year amortization to cash flow the payments, would be a hard no for me.
Land purchase interest rates
