Last year when AIN took a close look at the aviation finance industry, the prevailing sentiment among industry insiders was that if you were looking for money to finance a business jet, the money would find you. At the time, many of the aircraft finance divisions still felt they were relatively insulated from their mortgage brethren, even within the same company.
Floating interest rate
Unlike insurance rates, which are decreasing slightly or at least stabilizing, aviation financing rates have apparently bottomed out and were on the rise last month.
However, like home mortgage rates, interest rates for aircraft are still near historic lows. What direction they go next is impossible to predict accurately, but current economic conditions seem to point in a continued upward direction.
Interest rates for aircraft loans and leases are typically negotiated individually for each case, so lenders rarely publish their rates. Aircraft type, the value of the specific aircraft, its intended use, its location and the financial standing of the client, along with the down payment and length of the loan, all figure into the interest rate.