The Rate Trap
Lower rate, cheaper loan? Not when the term blows out. Compare asset finance against a mortgage cashout to see which costs more.
Asset Finance / Personal Loan
Separate loan. Shorter term, higher rate.
$
%
Fees
$
$
$
Exit Costs
$
Mortgage Cashout
Same debt rolled into the mortgage. Lower rate, longer term.
$
%
Extra Repayments
$
Refinance Costs
$
The mortgage cashout costs $14,032.43 more overall.
You save $534.03/month on the repayment, but carry the debt for 20 extra years. $20,730.43 more in interest.
Extra Interest Cost
$20,730.43
More interest on the mortgage cashout
Extra Time in Debt
20 years
Longer to pay off on the mortgage
Repayment Difference
$534.03/mo
Lower on the mortgage
Side-by-Side Breakdown
| Metric | Asset Finance | Mortgage Cashout | Difference |
|---|---|---|---|
| Loan Amount | $35,000.00 | $30,000.00 | $5,000.00 |
| Interest Rate | 8.50% | 6.15% | 2.35% |
| Loan Term | 5 yrs | 25 yrs | 20 yrs |
| Periodic Repayment | $730.08 | $196.05 | $534.03 |
| Total Interest Paid | $8,084.72 | $28,815.15 | $20,730.43 |
| Total Fees | $1,698.00 | $0.00 | - |
| Total Cost (Inc. Fees) | $44,782.72 | $58,815.15 | $14,032.43 |
| Years to Pay Off | 5 yrs | 25 yrs | 20.1 yrs |
Cumulative Interest Over Time
Total interest paid on each option over the life of the loan. The gap between the lines is the extra cost.