Hey everyone,
I'm just looking for some advice for my parents. They have a paid-off home in Calgary. However, they very stupidly racked up a LOC over the last 10 years to the tune of $150,000. Their interest rate is 2.45% (prime) and they've only been paying the interest, which has amounted to roughly $60,000 over that time frame.
Obviously, they lack financial skills, so in my opinion, I'm thinking they should get a mortgage instead with a fixed interest rate incase rates climb 1-2% soon. Also, perhaps it forces them to pay it off.
However, I'm not Warren Buffet, so I'm wondering what you think is the best for them? I know they could just double their payments, but they are not the type to stick to that without being forced. Also, if rates did go up by 2%, and they now have a 4.45% rate, they are going to be hurting.
Thoughts?
I'm just looking for some advice for my parents. They have a paid-off home in Calgary. However, they very stupidly racked up a LOC over the last 10 years to the tune of $150,000. Their interest rate is 2.45% (prime) and they've only been paying the interest, which has amounted to roughly $60,000 over that time frame.
Obviously, they lack financial skills, so in my opinion, I'm thinking they should get a mortgage instead with a fixed interest rate incase rates climb 1-2% soon. Also, perhaps it forces them to pay it off.
However, I'm not Warren Buffet, so I'm wondering what you think is the best for them? I know they could just double their payments, but they are not the type to stick to that without being forced. Also, if rates did go up by 2%, and they now have a 4.45% rate, they are going to be hurting.
Thoughts?