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发表于 2009-7-18 08:28
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ZT - TMG - Will 5-Year Mortgage Rates Fall Further?
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Banks last raised mortgage rates on June 9, when the 5-year bond yield was at 2.68%.
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& p* y: b1 v- O; W8 d$ ySince then, the 5-year yield (which guides fixed mortgage pricing) has fallen to 2.44%, but bank rates have not budged.3 p- e8 Q+ n* R9 m
9 E9 z" t7 `. I1 S; @BMO economist, Doug Porter, told the Toronto Star it's because banks "want to be convinced that it is not a flash in the pan and that any retreat in yields is sustained."
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He says: "I believe that we are probably not too far away from that point. It might take a little more of a deeper rally (in bond prices) to make it completely convincing."/ y( T0 | L# K( W4 G5 ^% [
9 e# X7 H7 g+ PThe often quoted CIBC economist, Benjamin Tal, thinks yields could fall another 0.05% to 0.10%, but any drop in fixed-rates will be short-lived. "By the end of the year, we'll start seeing rates rising," he says.# o# v$ I1 f2 w9 W! {
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If rates do drop another 0.10%, it would translate into a $5.50 monthly payment savings for every $100,000 of mortgage. That's a total savings of $478 over five years, assuming a 25-year amortization and typical fixed rates.
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' {/ F% _5 V. Y8 D0 \# `# dBut remember, trying to time bond and mortgage rates is financially hazardous. While you're waiting, rates can move the wrong way-quickly.
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You're usually better served by focusing on factors that can dwarf a 0.10% rate savings, like finding a mortgage with the optimal term and just the right amount of flexibility (pre-payment options, openness, readvanceability, etc.). Too much flexibility is a waste, and too little can cost you in the long-run.% _- [+ N1 v. y1 k# ^6 X7 I
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8 F( ^; u0 m: V/ G: t& x# X: Qwww.happymortgages.com |
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楼主: 郭森房贷
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发表于 2009-6-24 17:04
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