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Old 09.02.2015, 12:23
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Mortgage or general interest rate question

All Finance wizards

Want to know the opinion on mortgage rates. I have bought a new place and the handover is in 3 months. My bank offers me the possibility to freeze the rates now or do it anytime till it is due.

What would you suggest, is the rate bottomed out and a potential revival in euro zone numbers and recovering oil prices can push them up in short terms? Or is it other way round?

BTW, what are indicative Mortgage spread on libor, a 5 years rate and a 10 years rate?

Any recommendations and rate indications are highly appreciated.
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Old 09.02.2015, 12:46
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Re: Mortgage or general interest rate question

might help if you said what the rates were for the options available.
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Old 09.02.2015, 14:45
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Re: Mortgage or general interest rate question

As a rule banks only give advice that is ultimately to their advantage...
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Old 09.02.2015, 14:52
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Re: Mortgage or general interest rate question

http://www.finanzmonitor.com/immobil...-festhypothek/
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Old 11.02.2015, 22:33
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Re: Mortgage or general interest rate question

Comparis (https://www.comparis.ch/hypotheken/zinssatz/vergleich.aspx?termid=10&cantoncode=ZH&maxloantova lueratio=65&isforselfusageonly=1) and Vermögenspartner Winterthur are two sites that provide rates of mortgage providers (https://www.vermoegens-partner.ch/de/dienstleistungen/aktuelle-zinsen/sub/zinsen-hypotheken/?mId=4) to give an idea of the market. Rates have actually slightly increased since 15 Jan, despite some predictions that the SNB's decision would bring the rates even further down.

The current 5 year rates are approx 0.9%, 10 year is at ~1.2% and Libor is at ~0.85%.
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Old 12.02.2015, 12:16
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Re: Mortgage or general interest rate question

Thanks all.

The key question now is should I freeze my rate for the mortgage which starts in 2-3 months? Is this the right time to next 2-4 months won't make a difference.

The situation is I will get the possession of my newly built dwelling in 2-4 months but bank has offered me the possibility to free the rates now.
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Old 12.02.2015, 12:18
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Re: Mortgage or general interest rate question

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Thanks all.

The key question now is should I freeze my rate for the mortgage which starts in 2-3 months? Is this the right time to next 2-4 months won't make a difference.

The situation is I will get the possession of my newly built dwelling in 2-4 months but bank has offered me the possibility to free the rates now.
see above. it depends on what the rates are.

if it is a 10 year fix at 9% vs a 3-month LIBOR+0.01%, I would go for the non-fixed.
conversely, if it is a 10 year fix at 0.25% vis a LIBOR+0.3%, I would go for the fix.

Last edited by Phil_MCR; 12.02.2015 at 12:35.
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Old 12.02.2015, 14:42
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Re: Mortgage or general interest rate question

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The current 5 year rates are approx 0.9%, 10 year is at ~1.2% and Libor is at ~0.85%.
this
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Old 12.02.2015, 15:10
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Re: Mortgage or general interest rate question

On the basis of the information provided:

Maybe!
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Old 12.02.2015, 15:19
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Re: Mortgage or general interest rate question

I think I have not framed the question clearly.

I am asking should I wait 3 months to freeze my Mortgage rates, what ever trenches I take of 10y, 5y or Libor or should I wait for 3 months. I wait for 3 months if the likely hood is Interest rate may go down. I might want to Freeze it right now if the Rates are looking like they have bottomed out.

Once I know that I want to free them now then I need to figure out what are the best possible trenches, mid of libor, 5 or 10 years etc.. But that is a questions which comes a bit later.
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Old 12.02.2015, 15:21
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Re: Mortgage or general interest rate question

No one holds a magic ball that shows the future. Rates are already negative so waiting for further cuts looks like greed to me.
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Old 12.02.2015, 15:59
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Re: Mortgage or general interest rate question

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I think I have not framed the question clearly.

I am asking should I wait 3 months to freeze my Mortgage rates, what ever trenches I take of 10y, 5y or Libor or should I wait for 3 months. I wait for 3 months if the likely hood is Interest rate may go down. I might want to Freeze it right now if the Rates are looking like they have bottomed out.

Once I know that I want to free them now then I need to figure out what are the best possible trenches, mid of libor, 5 or 10 years etc.. But that is a questions which comes a bit later.
nope. you got it backwards. first you figure out what the best possible rates are for the different terms/libor then you decide which you want.

plus it isn't just about rates, but also flexiblity, ability to repay (early), etc.
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Old 12.02.2015, 16:17
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Re: Mortgage or general interest rate question

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Thanks all.

The key question now is should I freeze my rate for the mortgage which starts in 2-3 months? Is this the right time to next 2-4 months won't make a difference.

The situation is I will get the possession of my newly built dwelling in 2-4 months but bank has offered me the possibility to free the rates now.
Nobody knows, and apparently nobody here is in the mood to make bogus claims.

If anybody could answer your question with reasonable certainty they'd billionaires in no time.
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Old 12.02.2015, 16:19
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Re: Mortgage or general interest rate question

https://www.zkb.ch/de/pr/pk/finanzie...ngen-0215.html

But as you might have heard, predictions are very difficult to make - especially about the future.
I could try digging out the old newsletters and check their track-record - but I have a feeling it isn't great ;-)

The above quote is now even more true because in contrast to the last couple of years, the SNB can actually run its own monetary policy and doesn't have to follow the ECB policy too closely.

In the past, those who went libor were on the right track.

Rates were supposed to go down due to the recently introduced negative interest, but this didn't really happen on a broad scale because banks claim they don't earn much (or nothing) on the current rates already...
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