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10-12M mortgage
Rank: Member Joined: 6/21/2010 Posts: 345 Location: easto
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This is where am coming from - http://www.aren.co.ke/calculators/loancalc.htm
LOAN REPAYMENT CALCULATOR Amount Borrowed 10,000,000 Annual Interest Rate (%) 3 Number of Monthly Payments 180 Monthly Payments 69,058 Total Payment 12,430,440 Total Interest 2,430,440 "The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
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Rank: User Joined: 1/20/2014 Posts: 3,528
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That loan is dirt cheap, go for it. I would go option 3 way and fast track repayment. Remember the asset 'property/house' will be appreciating in value over the long run!!! Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
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Rank: Member Joined: 3/3/2016 Posts: 132
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Yeah, 3% is too a good a deal to pass up I think. Whatever option you decide, I'd take the mortgage.
Also, I think it's important to remember that monthly payments are stagnant, rents are not. Think about what rents were 5-10 years ago in Nairobi. They probably won't be 30k or 50k forever.
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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Its a no brainer, take the mortgage quick quick. The test is simple, its a good deal as long as the interest component of the monthly payments are lower than the rental incomes. Principal component is an investment. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Veteran Joined: 12/4/2009 Posts: 1,982 Location: matano manne
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@T9, I'd go for the mortgage without thinking twice. Please share the fine details of the procedure and process with at rahatupu at ymail dot com.
One more thing, the banks have a way of working round the restrictions on commercial properties. However, you'd have to already have the land on which to put up a commercial building (you could get this from your sacco), so the 10-12m could be used for construction of say ground floor.
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Rank: Member Joined: 6/21/2010 Posts: 345 Location: easto
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Obi 1 Kanobi wrote:Its a no brainer, take the mortgage quick quick.
The test is simple, its a good deal as long as the interest component of the monthly payments are lower than the rental incomes. Principal component is an investment. That is very good to realize, hadnt looked at it this way..I should have taken more Econ units  . Its not so obvious to me. I look at the installment vs Income..Thanks a lot Obi..  "The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
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Rank: Member Joined: 6/21/2010 Posts: 345 Location: easto
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Rahatupu wrote:@T9, I'd go for the mortgage without thinking twice. Please share the fine details of the procedure and process with at rahatupu at ymail dot com.
One more thing, the banks have a way of working round the restrictions on commercial properties. However, you'd have to already have the land on which to put up a commercial building (you could get this from your sacco), so the 10-12m could be used for construction of say ground floor. Thanks Rahatupu. Nitarudisha mkono.. "The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
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Rank: New-farer Joined: 2/14/2015 Posts: 98 Location: Kenya
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tnai9 wrote:Jon Jones wrote:
If its possible to get the cash 12 million, buy an eighth in a satellite town like Ruiru...build bedsitters and you will be smiling all the way to the bank.
Other conditions I have 1. Only one mortgage allowed at a time. 2. Can only buy a residential house, fully built(no off plans), no commercials With those conditions, consider this option: Buy a fully built small residential house with a large compound e.g., 1/2 acre or 1/4 acre. And then you can consider building another house(s) in the site to generate income - in the longterm. But, of course take the money - maximum allowed.
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Rank: Elder Joined: 11/5/2010 Posts: 2,459
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Boss at 3% you don't even need a calculator. You are getting free money (inflation @7%).
Another sweetener, mortgage relief of up to 12,500 deductible from taxable income.
If your employer can agree to effect the above at source, your monthly interest charge drops by another 4k.
However, you need to find out who caters for the fringe benefit tax I.e. the difference between what you are paying in interest and what kra thugs usually call the fringe benefit tax rate. It's usually announced quarterly and it's the average of 91-day t bill rate for the preceding quarter.
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Rank: Member Joined: 3/26/2012 Posts: 280
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I wouldnt accelerate payments if the job is secure n salo okay. You will miss out on the concessional interest. Do an excel work out. Having said that; go for not so mordern house but on a big compound. Eg Otiende; kimathi east. In future you can demolish the house and build flats. DOH
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