Sale to raise equity capital
As we are about to start the house project, I have held another sale to generate equity.
Since my handyman skills are about the same as those in the GIF, personal contribution / muscle mortgage will help us very little. Therefore, the deposit has to be attacked on a smaller scale.
However, the emphasis is really on "on a smaller scale" - all in all, I'm trying to keep the equity as low as possible and take out more credit and encumber the deposit as little as possible.
There are certainly enough opinions on this and the argument that the interest expense saved represents a tax-free, risk-free return is entirely justified.
For me, it is a "yield bet". The market yield is around 10% p.a. nominal, i.e. excluding the effects of inflation. With an interest rate of just over 3% for building loans, it would be a bad deal for me to liquidate my deposit for this.
If something changes after the fixed interest rate and the interest rate on the loan is 8%, for example, you can always switch in the future.
As we all know, the accounts are settled at the end.
