this post was submitted on 06 Jun 2026
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me_irl
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Funnily it's better the higher it is.
Someone complained wildly when we bought an appartement at 3.5%, they were ha ha that's so easy I had to pay 12%!
But my price was much higher, as everyone now can borrow more, and it makes sense to take on a 20 year loan. With 12% you borrow less, and also it doesn't make sense to borrow for more than like 12 years, so prices adjust. On top of that, if ever you lose your house (or it's degraded) I personally prefer the base price being 150K instead of 450K...
So yeah it's not just lower is better in the housing market.
Edit: Loool, how hard is it to understand buying a 200k house with a 12y loan is better than buying the same one at 400k paying a loan during 25 years. It's not as you'd one day cash out the 200k or 400k.
Nothing you said was correct or made sense...
Lower interest rates are better. You waste less money paying to bank to exist and profit from you.
No because now people can borrow more to buy a house/apartment, which drives prices up.
Imagine if it wasn't 3 or 12% but 50%. You'd have to almost pay in cash, do you think an apartment would cost 400.000€? Some rare one yes but the most no.
Housing is a closed marker, everyone needs housing.
This isn't true at all. They don't suddenly have more money to burn, and in fact, in the US, the amount you can borrow is based off of credit score, not the going interest rate.
I still don't really understand what you're trying to say to be honest. You owe the bank less at lower interest rates. Higher interest rates cause you to owe the bank more. You do not have to buy outside of your means if the interest rates are low, and in fact, the financially responsible thing to do is to buy well within your means while they're low and lock in lower interest for the term of the loan.
I think what you're trying to say is that when interest rates are low it becomes a seller's market. While true, this is not permanent and you will save money in the long run if you buy with lower rates. I think you're stuck on the short term and not thinking of the long term.
For example, rentals in my area have surpassed my mortgage payment by a good amount. If I didn't buy when rates were low, this: 1, may have not been the case due to higher monthly payments, and 2, I might have gotten trapped in the rental cycle and never been able to own a home, ending up paying more than what I would have if I purchased a home while rates were low.
I'm neither talking about sellers markets or buy vs rent.
I'll put it as short as I can: if people can borrow more, then prices will go up, because everyone needs a home, and there is a finite number of homes. You are basically fighting with everyone else who want to buy a home when you want to buy.
So if everyone can borrow more (low rates) then that doesn't give you a better house, because everyone can now bid higher too.
And the reverse when it's expensive to borrow of course.
You are talking about day to day economics, and yes I am sure you made a good choice stopping renting (economically).
But you seem to think, that in a market with very expensive loans, it's worse somehow.
If it's very expensive to borrow, the 450k house suddenly has no buyers and has to drop the price. Over time it becomes a 300k house (for example).
Are you better off with that? Yes. Not because you'll pay your bank less, but you'll pay them during a smaller time (at 12% it doesn't help taking out a 25 year loan, it doesn't make sense).
Also, as a bonus, usually when we already own, we go from less hood to better (better/bigger/more expensive) so if prices are low it's cheaper to upgrade.
And on a final note, the "450k worth", is not useful money, except if you sell it to live in a less good place (or if you have many houses) which people rarely do.
Hope it clears it up a bit!
What? You're confused. Lower is always better. I bought my house when interest was 2.5%, pretty much the bottom of the interest rates during the start of covid. My house loan was around 450K. By the time I've paid off my loan (if I were to make the normal monthly payment) I'll have given the bank over 750K dollars. Even at an amazing rate, some bank gets 2/3s the cost of my house in interest. At 12%, a 30 year, $450,000 loan would have you paying the bank 1.8M dollars, meaning some bank gets over 3x the cost of your house in interest. That's insane. I get that you're saying people will buy worse houses to not borrow as much money, but that's not really a win. A family of 5 can't fit in a one bedroom apartment.
See my comment above.
You would pay 12% for 8 years not 30, because high interest rates drive housing prices down.
Also no, people wouldn't buy worse housing, it's a closed market. If no one can pay 450K because it'd be insane and you couldn't afford the monthly payments (you as a large swath of the population), the prices go down.
This is market economy with the twist that everyone needs housing, and the supply is quite fix.
Lower is definitely always better in this case, there is no upside to paying more interest since you can typically get around the same range (give or take) no matter the term length.
See my comments above.
It doesn't track. I didn't buy out of my means when I purchased a home at a low rate. In fact, it allowed me to afford a better home for a cheaper price. You are not suddenly worse off at lower interest rates, infact, you owe the bank less. That doesn't mean the duration of your loan changes. Referencing your example, you can still get the same term loan (12 yr is what you used, but in the US that would be an unusual duration), and the loan itself is cheaper.
Why would I give the bank extra money?
Okay let me explain. Of course you'd take the best loan when you can, but when interests are very low, the prices are very high. And vice versa.
I'm not talking about someone getting a slightly better loan for their purchase, I'm talking about the fact that if people can borrow more (low interests enables longer loans) then prices go up. Because people pay more for the same thing, because they can. And they do.
++rate is only better if you already have a lower rate because it generally means appreciation of the property asking price, and depreciation of your payment and the amount you still owe, all have accelerated.
This is because loan rates rise and fall with the prime rate, which is mostly tied to inflation rate, AKA the rate of currency depreciation.