Catgrader140m - 3/3/2021 13:12
coup - 3/3/2021 08:05
scottyb69 - 3/3/2021 06:43
locked in 3.85 on a 30 year at FCS back in January. One month later...... 1% higher and climbing.
Locking long term rates over last 25 years has been a costly mistake, haven't seen anything to change my mind @ this point
1.5 % premium for 30 year locked vs 5 year locked amounts to $150- $225 acre added cost on $10- $15,000 acre ground. Take the int cost savings and invest in assets on the farm that will produce 10-20% ROI year after year. Doing so will be the pants off locking in long term rates over a 30 year period.
No, that amounts to $100-$150 at approx 3% minus your 1.5% “premium” for using variable rate. That may be, but I would reconsider your thoughts as of the late. For a short window this summer, land was down and interest was way down before commodity turned around this fall. Why would you not take advantage of 2.8% interest over 30 years? You talk like Interest will never go back to 6-8%? What happens when your variable term is up? Then what? What if it’s double? That’s the difference between owning a farm still and giving it up. I know my decision, buy a farm for 10k at 2.8% and know I can make my mortgage then gambling on saving 100-150$ an acre not knowing what the future in interest rates hold. I’m baffled you think going variable rate currently is more beneficial. I’m all about taking a calculated risk, but let’s not gamble to hard.
Would like to see your math how you come up with $100-$150 acre.
For one thing if you have to borrow money for 30 years to make the deal work , person has no business borrowing the $.
interest rates
