Shall i fix my mortgage rates now?

Question

Shall i fix my mortgage rates now?

Answer 1

Don't do anything until the election is over.

Answer 2

yes

money is going to cost more for years

Answer 3

I work in a National Bank.  It's not as easy to get a loan now as the requirements have gotten much more conservative.

However, the general consensus among economists is that the 10 yr treasure note will continue to increase.  It has been rising steady since the beginning of the year.  The first loan I did this year was a 15 yr , A credit, it was 5.05.  That same loan now is around 6.5

The "prime" rate has nothing to do with long term borrowing. It is the short term rate that effects credit card, car loans etc.

The 10 year note is what banks use as the cost of funds on long term debt.

At this moment, prime rates are much lower than mortgage rates, but if you wait to lock in, the fixed rates could be even higher.

I recommend locking in now, you can always refi when rates eventually come down. But at least you know you have a definitive ceiling.  Shop around, and don't compare the rate on the principal as much as the "APR".  You can find it on the truth in lending disclosure.

Lenders love to charge a lower rate, but at the same time finance so much in "fees" that you actually pay a higher rate. Fees are another way of adding interest.

Answer 4

Hi,

I am a Mortgage Broker in Canada.  Your question relates to predicting the direction on interest rates in the future.  Although you can research a lot and find different experts trying to tell you where they will be, nobody will now for sure.

When I answer this question to my clients I assess the following:

1) How long are you planning to live in your current home?

(to avoid penalty charges if you sell and decide not to port your mortgage)

2)  If interest rates go up how much of a larger mortgage payment can you afford? (so your payments do not go out of control)

3)  What is your risk profile?  (Are you a conservative person or risk taker)

4) How is your current cash flow and what do you expect it to be in the future (to assess how to best structure their mortgage)

This will guide me and my client to understand more of their internal financial situation where we have control vs the external macroeconomic activity which we have no control.

I hope this helps!

http://camilo.ca