Thread: Morgage Terms
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Old 28.07.2010, 23:03
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Re: Morgage Terms

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We`ve been with the Raiffeisen for general banking and also for the mortgage for the last 5 years. (We also do a relativly small amount of Asset Mismanagement with them although most assets are with a very small private bank). Our asset portfolio at the RB has a larger value than the sum of the two mortgage tranches we owe them, but so far the best can get fom the is 2,8% for a ten year fixed-period mortgage. One tranche (equal to aut 1/3 of the mortgage currently has a variable rate and the other is now due for renewal. In the light of coments here I think I should aim to re-negotate the mortgages along the lines of 1/4 to 1/3 as a Libor mortgage and the rest as a ten-year tranche at 2,8% or better. History seems to suggest that inflation is normally the way forward when counties have a bad debt problem, and even in Switzerland I have the impression that inflation is already present in some sectors- at least when reviewing the quotations that people who call themselves "Handwerker" present. I would certanly welcome any further advice or comments.

Ten years is a long time. But our Cantonal bank does think that interests rates (their mortgages on fixed terms are 2,7-2,8% -- I don't know where these <2% rates are available...) will rise. Probably true if inflation in the US (and perhaps economic disaster) happens the way Martin Wolf in today's FT is opining.

We've moved enough assets to Switzerland to cover the eventual repayment of our residential mortgage, and if we hadn't fixed the rate for 5 years we'd probably pay it off now. As I've said elsewhere, there is so much doubt in the markets over USD, GBP and EUR that serious money is going into SGD and CHF, swamping those little countries that can't absorb the inflows. And are having a hard tie neutralising them.

Let it be said, though, that I don't give out investment advice for free or otherwise. The foregoing is for amusement purposes only.

BTW, as for Raiffeisen, isn't that the bank that got all those Hungarians into Swiss franc mortgages?
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