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  #61  
Old 09.03.2012, 17:41
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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Previously:
You have £200k debt, and £100k savings. Bank goes bust. You owe the bank 100k
Now, bank goes bust. You get back whatever can be recovered from your savings in the aftermath. In the UK this is FSA guarantee of £50k, the rest, if any, would come from the liquidators over a period of time. You owe £200k to the bank.
i think the FSA limit has been upped, but in any case, for the excess, i wouldn't count on getting anything back...
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  #62  
Old 09.03.2012, 18:05
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

Have any of you actually had experience with a bank going bust that you were with? You're starting to scare me...
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  #63  
Old 09.03.2012, 18:09
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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Have any of you actually had experience with a bank going bust that you were with? You're starting to scare me...
there are probably a lot of banks that should be bust but are being kept alive by 'mark to fantasy' rules or temporarily bailed out by taxpayers.
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  #64  
Old 29.03.2012, 21:52
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

3 month Libor now 0.11 - surprising with all the other efforts to keep the CHF exchange rate low
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  #65  
Old 30.03.2012, 11:04
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

too low is just too low! And it will continue creeping up:

http://www.investorpoint.com/rate/!LIBOR3MCHF-3%20Month%20LIBOR%20CHF/

I think they have held the 1.2CHF peg without problems so therefore the path is back to normality

BTW, SNB is warning that rates may come back sooner than thought to normality

http://www.letemps.ch/Page/Uuid/ffc6..._taux_plancher

and this will affect mortgage interest rates, so the following warning:

L’occasion de réitérer ses avertissements au secteur immobilier. «Cela doit aussi être pris en compte par les personnes qui recourent à l’emprunt, en particulier à long terme, comme celles qui sont actives sur le marché immobilier», a-t-il poursuivi. Selon lui, il est «inapproprié» de penser que l’environnement actuel en matière de taux d’intérêt corresponde à une «nouvelle normalité». Les personnes qui s’endettent sur le long terme doivent être «entièrement conscientes de cette réalité et établir des plans en conséquence», a-t-il recommandé.
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  #66  
Old 30.03.2012, 11:28
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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i think the FSA limit has been upped, but in any case, for the excess, i wouldn't count on getting anything back...
Yes, you're right, it's 85K now (170K for joint accounts). And you can have another 85K in another institution, and another 85K in another institution, and so on. (definition of institution here is important - some banks are part of the same "institution" so you have to be careful)
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  #67  
Old 16.05.2012, 18:37
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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I personally couldn't give a t*ss should my house go down in value. I don't plan on selling it and it is a home for my family, not an investment.
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Agree 100%.
This is the central point in my opinion.
I understand, but unfortunately your bank in CH will care. If the value of your property drops below the 80:20 debt to deposit ratio, the bank will (or at least can) demand back the difference in order to restore the 80:20 ratio (How one is supposed to come up with the extra cash is another story!)

Example:
House worth 1,000,000 CHF
Mortgage worth 800,000 CHF

Property value drops to 800,000 CHF
Your mortgage needs to be reduced to 640,000 CHF.

So bank says, "Can I please have 160,000 by the end of the month?".
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  #68  
Old 17.05.2012, 00:21
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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I understand, but unfortunately your bank in CH will care. If the value of your property drops below the 80:20 debt to deposit ratio, the bank will (or at least can) demand back the difference in order to restore the 80:20 ratio (How one is supposed to come up with the extra cash is another story!)

Example:
House worth 1,000,000 CHF
Mortgage worth 800,000 CHF

Property value drops to 800,000 CHF
Your mortgage needs to be reduced to 640,000 CHF.

So bank says, "Can I please have 160,000 by the end of the month?".
... And the bank can certainly do this. And they did when the last bubble exploded in the 90's. But the most common case was when owners had to renew their loans. Unlike in other parts of Europe, banks have no obligation whatsoever to reconduct the mortgage, and if they do, they can re-evaluate the property and grant you a mortgage on the 80% of the new estimation. Many owners had to sell their flats & houses during 1991-95 due to that.
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  #69  
Old 01.06.2012, 12:04
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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As the subject says, that's the situation. CHF LIBOR is still going up (although very slowly)

http://www.global-rates.com/interest...-3-months.aspx

But the interests rates for (e.g.) 10 years fixed are going down. BCV has reached its minimum since I remember

http://www.bcv.ch/fr/particuliers/hy...re_a_taux_fixe

Which is an incredible 2.26%.

I'm seriously considering moving my LIBOR mortgage to a 10 years fixed.

What do you think will happen in the next 6 months? I honestly don't see the interests going up that much, but I must say these 10-years rates are extremely attractive.
So, exactly 3 months after, time to wrap up things.

It looks like I've been right not to follow what my bank was suggesting. LIBOR has been stable in the last months and even going down now.

What's amazing are the fixed interests rates for long term. In three months they went down an average of 0.2%. With BCV, the 10 years is now 2.11%. Migros is at 1.9%, same for PostFinance.

AXA, with its 1.7%, is probably the lowest around. And without negotiation!

Now I'm really fighting with myself... another 3 months LIBOR with this economic situation seems like a safe bet, but who would turn down 1.7% for 10 years in his right state of mind?
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  #70  
Old 01.06.2012, 12:09
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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but who would turn down 1.7% for 10 years in his right state of mind?
Someone who strongly believes that the house they buy now will be worth significatnly less than 1.7% x 10 + any rental savings in ten years time. Or simply someone who can't afford a 20% deposit on a CHF1mln apartment.
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  #71  
Old 01.06.2012, 12:12
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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So, exactly 3 months after, time to wrap up things.

It looks like I've been right not to follow what my bank was suggesting. LIBOR has been stable in the last months and even going down now.

What's amazing are the fixed interests rates for long term. In three months they went down an average of 0.2%. With BCV, the 10 years is now 2.11%. Migros is at 1.9%, same for PostFinance.

AXA, with its 1.7%, is probably the lowest around. And without negotiation!

Now I'm really fighting with myself... another 3 months LIBOR with this economic situation seems like a safe bet, but who would turn down 1.7% for 10 years in his right state of mind?
After 2 years on LIBOR, I fixed last week with PostFinance with part on 6 years at 1.5% and the rest on 10 years at 1.95%. You might manage a few more quarters of savings by staying on LIBOR, but I don't see how fixed rates can go significantly lower so for me it seemed best to fix now.
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  #72  
Old 01.06.2012, 12:17
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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After 2 years on LIBOR, I fixed last week with PostFinance with part on 6 years at 1.5% and the rest on 10 years at 1.95%. You might manage a few more quarters of savings by staying on LIBOR, but I don't see how fixed rates can go significantly lower so for me it seemed best to fix now.
I am also tempted to go 10 year fix from my current LIBOR.

I also don't see how fixed rates can go significantly lower.
The only argument I have for delaying is that I do not foresee any sudden changes in Swiss interest rates while the SNB battles to keep the CHF tracking the euro - of course, I have been wrong before
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  #73  
Old 01.06.2012, 13:06
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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I am also tempted to go 10 year fix from my current LIBOR.

I also don't see how fixed rates can go significantly lower.
The only argument I have for delaying is that I do not foresee any sudden changes in Swiss interest rates while the SNB battles to keep the CHF tracking the euro - of course, I have been wrong before
I agree with the macro view, but my logic was that with rates where they are now, the risk is almost exclusively to the upside.

The bank is taking a 1% cut so in the worst case scenario in which real rates go to zero then I'm paying 0.95% too much for 10 years. For me I prefer to fix now rather than risk missing out on perhaps 8 or 9 years of extremely low interest.
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  #74  
Old 01.06.2012, 13:55
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

Our libor just rolled over again. The bank contacted us with fixed rates of 5 years: 1.3%, 10 years: 2% They seem way too eager to make more money out of us.

I don't mind paying more to move to a fixed rate when the libor starts going up significantly, but I would mind paying double while it was stable or possibly dropping again. We are staying with the 1 month libor to see what happens with Greece.
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  #75  
Old 13.09.2012, 16:43
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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Our libor just rolled over again. The bank contacted us with fixed rates of 5 years: 1.3%, 10 years: 2% They seem way too eager to make more money out of us.

I don't mind paying more to move to a fixed rate when the libor starts going up significantly, but I would mind paying double while it was stable or possibly dropping again. We are staying with the 1 month libor to see what happens with Greece.
i would imaging the long dated interest rates would move far quicker than the short term libor rates.

by the time you see a significant movement in 1 month libor, the 10 year libor could have moved out already by quite a bit.
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  #76  
Old 13.09.2012, 16:57
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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?....The bank contacted us with fixed rates of 5 years..... They seem way too eager to make more money out of us....
What do you expect banks are in the business of doing apart from making money on money (that doesn't really exist but another thread)?

Us mortgage payers are the only action in town with money otherwise for free and little returns anywhere else. Plus the banks have all this free euro and us money available with nowhere to put it, we're the safest bonds in town what with countries defaulting.
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  #77  
Old 13.09.2012, 16:59
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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Have any of you actually had experience with a bank going bust that you were with? You're starting to scare me...
Define bust, technically half the banks in UK, US, and UBS are/were bust since 2008, plus a few German banks etc.

Not to mention potential mark to market derivative exposure as discussed elsewhere.....

Last edited by magyir; 13.09.2012 at 17:00. Reason: Clarity
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  #78  
Old 13.09.2012, 17:44
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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i would imaging the long dated interest rates would move far quicker than the short term libor rates.

by the time you see a significant movement in 1 month libor, the 10 year libor could have moved out already by quite a bit.
We are with the 1 month libor so we can re-evaluate at the end of every month. We are of course watching all rates and indicators. Not fixed yet, but might in a month or so.

I'm still saving and putting it away for a rainy day. I would prefer to save and pay off some debt when rates go up instead of paying it up front to the bank.
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  #79  
Old 13.09.2012, 17:47
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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We are with the 1 month libor so we can re-evaluate at the end of every month. We are of course watching all rates and indicators. Not fixed yet, but might in a month or so.

I'm still saving and putting it away for a rainy day. I would prefer to save and pay off some debt when rates go up instead of paying it up front to the bank.
this is true - it is essentially a race right now - if you are happy to take the risk, you are probably likely to save enough from LIBOR and pay down the mortgage and reduce your future interest to make sticking to LIBOR worthwhile.

pay off the mortgage before LIBOR goes up and you're laughing!
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Old 13.09.2012, 17:53
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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this is true - it is essentially a race right now - if you are happy to take the risk, you are probably likely to save enough from LIBOR and pay down the mortgage and reduce your future interest to make sticking to LIBOR worthwhile.

pay off the mortgage before LIBOR goes up and you're laughing!
That's for sure. I guess we are lucky that we didn't take on too much debt and didn't go for the bigger house once we had kids.
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