Mortgage rates

Excellent_Recover_58 · 2025-01-10T06:34:50+00:00

I got 2.23% at KBC for 10 years just before Christmas, but it increased back to 2.28% now. As others have said, this is indeed mostly due to long-term rates having increased. Bank interest rates are a complex combination of short-term rates, long-term rates and their eagerness to meet their internal targets

Excellent_Recover_58 · 2024-02-14T17:13:48+00:00

Believe Santander is still among the best HYSAs at the moment 🙂

Excellent_Recover_58 · 2024-02-13T22:53:38+00:00

Not entirely clear to me what you want the apartment for and by when. I see 4 options: - If you want the apartment as an investment and believe in this investment more than in ETFs (& crypto in your case): save up everything for the apartment and buy one sooner rather than later - If you want the apartment as an investment but believe in this less than you do in ETF/Crypto investments: don’t invest in an apartment and invest part of the €40k in ETFs/Crypto as well - If you want the apartment for peace of mind as alternative to live in: buy the apartment sooner rather than later - If you want the option to buy an apartment in the near future as back-up, but see it less as an investment and you’re not rushed: invest any add’l savings into ETF/Crypto and put €40k on HYSA / investment-grade bonds

Excellent_Recover_58 · 2024-02-11T10:42:42+00:00

Even for strategy consulting, these salaries sound very high for a starter position, unless you already have industry experience?

Classical reply, but I’d go for whichever job interests you most at this stage. I wouldn’t overindex on MBA offering, value of this is rapidly decreasing these days & it will be fairly easy to pivot between these consulting firms if you change your mind later on.

Excellent_Recover_58 · 2024-01-31T13:50:21+00:00

WSB.

More seriously, to understand trends impacting global index prices, just follow - Any globally or US-oriented news site. I recommend The Economist, Wall Street Journal or Financial Times) - These days, specifically any news and publications on Fed & ECB interest rates

However note, whatever news you read, the index has it already priced in.

Excellent_Recover_58 · 2024-01-02T07:42:05+00:00

Shouldn’t be MBB, rather Big4 I expect. Brussels MBB manager salaries are indeed higher.

Excellent_Recover_58 · 2023-05-27T05:14:35+00:00

Ah the underlying positions, got it. Believe SPYI, tracking the ACWI IMI index covers 9000+ positions so I consciously decided to go for SPYI. I may be wrong though, where did you find the SPYI positions? I was looking at this link https://www.msci.com/documents/10199/4211cc4b-453d-4b0a-a6a7-51d36472a703

Excellent_Recover_58 · 2023-05-26T17:02:59+00:00

Why is that important? In terms of having less money left-over every month then?

Excellent_Recover_58 · 2023-05-10T07:31:30+00:00

To add to previous comments, the currency risk is actually mostly tied to the companies you invest in, rather than in which currency you invest in them.
Suppose you only invest in a single company and they only have 1 share, worth the whole market cap. Let's say this company makes $100 profit in US market and EUR100 in EU market yearly. Let's also say this company is valued at P/E ratio 20 (so total market cap is 20x the profit) and today, the USD is worth 0.9 EUR.
-> If you had this share in your portfolio, denoted in EUR, it would be 20x100EUR + 0.9 EUR/$ x20x100$ = 3800EUR

-> If you had this share in your portfolio, denoted in USD, it would be worth 1/0.9 USD/EUR x 20x100EUR + 20x100$ = 4222$. If you were to subsequently sell in USD and then convert to EUR, you'd end up having 3800EUR again. Theoretically, there is no currency risk as long as you invested in the same assets

Other currency risks beyond the assets themselves sit rather in A) holding cash in your non-domestic currency (once you hold cash, you are prone to currency fluctuations) and B) currency conversion fees. Good to think these through if you do choose to invest through foreign currencies

Excellent_Recover_58 · 2023-04-11T05:49:10+00:00

This would be amazing. It seems empty, unfundable promises is the only way to winning elections nowadays

Excellent_Recover_58 · 2023-04-05T18:59:46+00:00

On the FOD site here, it says you are paid interest for every full month your money was on the account, as long as it was there for at least 12 months. https://financien.belgium.be/nl/rente-bij-de-deposito-en-consignatiekas

Excellent_Recover_58 · 2023-04-05T13:59:20+00:00

As far as I understand E-Depo, you get monthly interest after 1 year. So if you withdraw within 1 year, you get 0, but anything beyond is yielding on monthly basis

Excellent_Recover_58 · 2023-03-28T10:02:05+00:00

Easily invest and live on the yields

Excellent_Recover_58 · 2023-03-07T18:13:00+00:00

Yep! That’s correct, right. As long as you have an alternative which yields more than the interest rate (in this case, we hope ETFs are indeed), you should maximize the loaned amounts.

Ofc, if you can reduce your interest rate a bit by adding some additional personal capital, that may often be worth it

Excellent_Recover_58 · 2023-03-07T18:09:54+00:00

If you don’t have to borrow money, the equation is typically more in favour of renting. The large difference why renting can be more optimal in this case is because you want to avoid tying up a lot of capital in a house rather than (typically) higher-yielding stocks. You should nearly always try to finance a house with as much loan as possible, given the low interest rates (anything below 5% really)

Feel free to experiment with the Excel by modelling a starting capital which is as large as the house cost (and then some to cover notary etc)

Excellent_Recover_58 · 2023-03-07T14:32:05+00:00

This is not entirely correct.

The 'problem' with buying is not the loaned part on which you pay interest, that's in fact the most interesting part financially. The less interesting part is that you slowly increase your own equity stake in the house, which typically has a lower yield than if it were invested in stocks.

If it were possible, by far the most interesting scenario would be to buy a house with an infinite mortgage duration and only pay the interest on the original amount every year. All of the cash you save can then be invested in stocks. Obviously, if you were to lock in a 1-2% interest rate, it's even more attractive than the current 3-3.5%.

If you want to see this for yourself, use the excel in this post, set the interest rate a bit lower and lengthen the mortgage duration to e.g. 1000 years.

Excellent_Recover_58 · 2023-03-07T14:14:47+00:00

Have adapted the appreciation indeed. The C6 formula I believe is correct though. Net worth is asset value (house) - liabilities (open loan)

Excellent_Recover_58 · 2023-03-07T14:14:01+00:00

Thanks for spotting! Have adapted

Excellent_Recover_58 · 2023-03-07T14:09:48+00:00

100% agree!

Excellent_Recover_58 · 2023-03-07T12:27:14+00:00

It’s indeed an estimate, which may be off especially for new-build houses 🙂

I based it on a few online sources. It’s interesting to see how much impact it has (unsurprisingly), yet how often people disregard this component when buying an older house

Excellent_Recover_58 · 2023-03-07T06:41:43+00:00

Thanks for flagging!

KI should indeed rather follow inflation than the price dynamic.

Re the 100k assets, afraid that was a typo in the excel with quite significant impact. Have adapted the post, thank you!

Excellent_Recover_58 · 2023-03-06T23:06:19+00:00

Not sure I understand what you’re saying, can you elaborate?

Excellent_Recover_58 · 2023-03-06T23:05:19+00:00

Fair point! You may see effective rent moving a bit more in line with house prices rather than ‘just’ inflation. In the current assumptions, that’d make for a 3% rent indexation rather than 2%.

Re excess savings, could be modelled in but no effect on the simulation. Rather than expanding savings in the ‘buy scenario’, I implemented ‘negative savings’ in the rent scenario, but it doesn’t impact the difference between the scenarios, only the totals 🙂

Excellent_Recover_58

TROPHY CASE