Interest rates, interesting times…

Interest rates - Interesting Times

Earlier in the year we wrote about the effect that interest rates has on the ability to borrow funds.

Effectively, as interest rates rise, the amount you can borrow reduces. Broadly, a 1% interest rate rise reduces your ability to borrow by 10% (of total debt), eg if you could borrow $1mil and rates rise 1%, then you can now only borrow $900,000.