Are interest rates really that high?

[firecadet613]

Our current boat loan for a boat we bought last year is at 7.5%. We're looking at upgrading, and our credit union can do it at 7.75% but only 50% of the value. I took a quick look at Key Bank, and their best rate for under 50k is 8.49, and Essex Credit told me the best they can do is 8.24. FICO and debt/income are not an issue.


Where do I go to get a good rate on under 50k?

 

[highslice]

Unfortunately, those are the going rates these days. Last year we got 6.25% for $70K financing, and I was pissed. Previous boat was 4% of $40K. The debt markets are weird right now. Mortgage rates went up 1/2 a percent on Monday for no good reason.

Good luck. Below are boat loan rates from Bank of America, which I believe now ranks as the largest marine lender in the country.



$10,000 - $14,999

9.99

%

$15,000 - $24,999

9.50

%

$25,000 - $49,999

9.25

%

$50,000 - $74,999

8.75

%

$75,000 - $99,999

8.50%

$100,000 and up

7.99%

 

[firecadet613]

Yeah I saw that. I guess we can always refi later on if rates go down.

 

[Go Aweigh2452]

Our current boat loan for a boat we bought last year is at 7.5%. We're looking at upgrading, and our credit union can do it at 7.75% but only 50% of the value. I took a quick look at Key Bank, and their best rate for under 50k is 8.49, and Essex Credit told me the best they can do is 8.24. FICO and debt/income are not an issue.


Where do I go to get a good rate on under 50k?

Did you look at a second mortgage? A lot of lenders can do that at very low rates right now? Plus run it out 30 years... Then when rates go down, refi...

Remember, you boat can be considered a second home.

 

[lcm133]

If you can find a Bank of America repo, just on it, they are offering 4.99% on 15 & 20 year boat mortgages right now...I just got one myself.

 

[Big Wolverine]

Why would someone take a 15 - 20 year note on a boat? Even if you get a great deal...you will still be upside down in just a few short months. Not the position I want to be in, especially with this economy.

I know that people are trying to become creative to afford things. But with the unknown ahead of us...boats are a pleasure item, not a must have. A house is a must have...shelter. I can't imagine having a boat loan for more years than my house mortgage. But that is just me...I like to sleep at night.

firecadet...what are you looking to buy? Have you sold your current boat yet?

 

[firecadet613]

Looking to buy a 24'-26' cruiser, ac/heat and a windlass are a must. Gen would be nice, but its not a MUST have. I most likely will put my boat up on boattrader and possibly eBay later this evening.

 

[Big Wolverine]

So a 260 Sundancer then would be a nice boat for you. Where will you be slipping it? Someplace in the Michigan City area?

 

[Scottzzzy]

It sure seems like interest rates are a lot like the cost of gas and oil, when the cost of crude goes up gas is quick to shoot up. But boy when it comes down the cost of gas sure does lag in coming down. The credit markets seem to always respond with increases soooo much faster than reductions! I dont think they want to loan the money as much right now until something, heck, anything stabilizes!

 

[bigduby]

Why would someone take a 15 - 20 year note on a boat? Even if you get a great deal...you will still be upside down in just a few short months. Not the position I want to be in, especially with this economy.

Because they don't have 150K laying around, but they do have 2K/month they don't mind parting with (numbers used are for example purposes only, no actual money was used in the making of this comment )

 

[KayKook]

Our credit union will take 1% off whatever a competing CU's best rate is.

 

[firecadet613]

So a 260 Sundancer then would be a nice boat for you. Where will you be slipping it? Someplace in the Michigan City area?

Thats up in the air. As of right now it will be trailered, we are just NW of Indy. The big lake is two hours away, so that is definatly a consideration, as the lake we normally go to is about 1.5 hours away as it is, and is a puddle considered to Lake Michigan. Slips are a lot cheaper up north also!

Our credit union will take 1% off whatever a competing CU's best rate is.

Where is your CU?

 

[sbw1]

Why would someone take a 15 - 20 year note on a boat? Even if you get a great deal...you will still be upside down in just a few short months. Not the position I want to be in, especially with this economy.

People do it to preserve cash and then use their cash to increase the funding of capital preservation portfolios. A 4.99% mortgage interest rate was recently very doable and holding high quality, tax free bonds in an investment account can easily produce 6% overall yields if you ignore the mark to market rule and hold the bonds to maturity. Staying fairly short on the bonds helps. It also helps if you have a small mortgage. Not all boat loans cause you to be upside down even over a 15 year term. Boats should never be a significant portion of your net worth, and ideally you should be able to write a check for the outstanding balance of the mortgage without feeling pain. The mortgage should be a convenient way of buying a toy.

 

[Sundancer123]

https://www.penfed.org/productsAndRates/loans/vehicleLoans/boatLoans.asp


Variable New & Used Boat Loan Rates3.5% APR
Initial rate; rate after 5 years is Prime + 0.25% variable12 year loan amortized as 20 years; up to 70% LTV$40,000 - $100,0003.74% APR
Initial rate; rate after 5 years is Prime + 0.49% variable12 year loan amortized as 15 years; up to 75% LTV$40,000 - $100,0004.15% APR
Initial rate; rate after 5 years is Prime + 0.9% variable12 year loan amortized as 15 years; up to 80% LTV$40,000 - $100,0005.15% APR
Initial rate; rate after 5 years is Prime + 1.9% variable12 year loan amortized as 12 years; up to 85% LTV$40,000 - $100,000

 

[Tail Chaser 661]

Maybe a home equity line of credit at prime or less.
Mine was at 3.1/2 % last month.

Then do some 0% balence transfers after that.

 

[glocklt4]

Why would someone take a 15 - 20 year note on a boat? Even if you get a great deal...you will still be upside down in just a few short months. Not the position I want to be in, especially with this economy.

And because you can get a better rate on a longer note, pay the same amount per month that you would on a 4-6 year anyway and you save a bunch of interest....

 

[ShamuToo]

Ah, Debt. It makes the wheels of this great nation turn.

 

[Alex F]

Why would someone take a 15 - 20 year note on a boat? Even if you get a great deal...you will still be upside down in just a few short months. Not the position I want to be in, especially with this economy.

I know that people are trying to become creative to afford things. But with the unknown ahead of us...boats are a pleasure item, not a must have. A house is a must have...shelter. I can't imagine having a boat loan for more years than my house mortgage. But that is just me...I like to sleep at night.

One of the reasons I can see is to keep your minimum/required payments low. If you have extra you can make larger monthly payment, but if things get tough your minimum payment is low.