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Yacht financing question....

Discussion in 'General Yachting Discussion' started by jason fifield, Sep 23, 2022.

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  1. jason fifield, Sep 23, 2022
    #1
    jason fifield

    jason fifield New Member

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    Sep 28, 2017
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    Location:
    California
    Looking to purchase in the next 6 months and curious if anyone her can chime in regarding the current state of yacht financing (given the hawkish Fed) and where it might go in the next 6 months or so. Just did a mortgage as I prepare to semi-retire and it was no picnic. Are yacht rates correlated to mortgage rates and if so; is there a 'normal' premium over 30 year fixed for a yacht? Interestingly; I was just quoted some financing for a piece of capital equipment for my company and the rate for the machinery was less than the rate for my recent mortgage. Go figure.....
  2. Kevin McAbee, Sep 25, 2022
    #2
    Kevin McAbee

    Kevin McAbee New Member

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    You’ll likely not find a term longer than 20 years. I’m a mortgage guy of 20 years. Bought and financed a 50 footer earlier this year. It was no cake walk. Most will want to see at least 1 to 1 liquidity. Basically enough in liquid reserves to write a check for the purchase. Treasuries drive mortgage rates. Yacht financing is portfolio funded…..tied to the prime rate.
  3. SkipJay, Sep 26, 2022
    #3
    SkipJay

    SkipJay New Member

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    There are still decent rates out there. I would work with a broker that can shop rates based on your needs and financial situation. As of last week I was still seeing high 4% on 20yrs. Friend just closed on a 20yr at 4.79% for a used purchase. I am confident rates will continue rising through Q4.
  4. jason fifield, Sep 26, 2022
    #4
    jason fifield

    jason fifield New Member

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    Thank you both for your replies. 4.79 is much better than I anticipated. We will see if the higher rates cause some demand destruction resulting in the prices of boats coming back down to earth..........
  5. bayoubud, Sep 28, 2022
    #5
    bayoubud

    bayoubud Senior Member

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    Price reductions are increasing for real estate and boats. Future price reductions might compensate for increased rates.