In Part 2 of our special COVID-19 Adam Answers series, Adam answers commonly asked questions about the impacts COVID-19 is having on rates.
Question: I am planning to purchase a Cirrus SR 20 next month for $290k. I’m planning to put 40% down so I can borrow less. What type of interest rates should I expect?
Answer: I certainly understand your desire to borrow less, sometimes; however, when you borrow less it can cost you more in rate. For example, when borrowing less than $150k most lenders have increased interest rates to make up for lesser amounts being borrowed. However, in this case, assuming a $290k purchase amount and 60% financed, borrowing more than the $174k loan your seeking won’t get you better options. We are seeing rates as low as 3.75%.
Question: I just refinanced my mortgage and qualified for a rate of 2.75%. What type of rate should I expect right now from aircraft lenders? Should I wait a few weeks to see if they continue to drop?
Answer: Rates are at a historic low and many aircraft lenders don’t/won’t have the ability to go any lower without losing money. Bottom line, there’s probably a no better time than now. If you think you will only be owning an aircraft for a couple of years, you may want to consider a floating rate.
Question: I recently noticed that aircraft lenders are advertising lower rates. Can I still get a 20-year fixed with those rates, and is the down payment still 15-20%, or have the loan terms adjusted with the rates?
Answer: Yes, you can still get 20-year fixed rates and at very good rates. However, for whatever reason, there seems to be an increase in advertisements where buyers really need to read the “fine print” lately. We’ve had a number of folks come to us either after realizing the rate they thought they had wasn’t really what it was initially quoted to be OR, where we’ve suggested they read the fine print and end realizing if it seems too good to be true it probably is.
Have questions for Adam? He is happy to answer them. Submit your questions here. Great rates. Great terms. Helpful and responsive reps. Three good reasons to turn to AOPA Aviation Finance when you are buying an airplane. If you need a dependable source of financing with people who are on your side, just call 800.62.PLANE (75263) or click here to request a quote.