Hi,
I have been hearing people saying that lower prime rate (assuming variable rate mortgage and locked-in period) will result in better property cashflow.
However, I thought that the payment for the mortgage would stay at same regardless of rate changes. In case of rate drops, more goes to the principal; if rate increases, the opposite applies (at least what my banker told me). How does it equate to more cashflow?
Thanks,
Lucas
I have been hearing people saying that lower prime rate (assuming variable rate mortgage and locked-in period) will result in better property cashflow.
However, I thought that the payment for the mortgage would stay at same regardless of rate changes. In case of rate drops, more goes to the principal; if rate increases, the opposite applies (at least what my banker told me). How does it equate to more cashflow?
Thanks,
Lucas