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Old 01.03.2012, 09:48
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CHF LIBOR slowly creeping up, but fixed interests going down

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.
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Old 05.03.2012, 00:58
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

This is a good question as I have to re-up in 6 months time.

The ZKB has a huge margin on Libor at the moment compared to other institutions though.
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Old 06.03.2012, 11:55
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

Also considering 10 year fix; looking in Comparis 2% (or less) seems possible
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Old 06.03.2012, 12:18
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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Also considering 10 year fix; looking in Comparis 2% (or less) seems possible
2.05% and no need to haggle from PostFinance...

https://www.postfinance.ch/en/priv/prod/interest.html
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Old 06.03.2012, 14:13
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

for me, 10 years at 3% was already a no-brainer, so 10 years at 2% is even more so.

i think my strategy would be to keep 50% under as long a term fix as i could 10 year 2%, or 15/20 year 3% with the intention of not paying this down as much as possible as it is 'free money'.

then the remaining 50% as LIBOR to keep costs down and to repay the LIBOR component if rates ever shoot back up again. (or add a third slice at 3-4 year fix if not feasible to repay 50% within a short notice period).
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Old 06.03.2012, 14:37
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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for me, 10 years at 3% was already a no-brainer, so 10 years at 2% is even more so.

i think my strategy would be to keep 50% under as long a term fix as i could 10 year 2%, or 15/20 year 3% with the intention of not paying this down as much as possible as it is 'free money'.

then the remaining 50% as LIBOR to keep costs down and to repay the LIBOR component if rates ever shoot back up again. (or add a third slice at 3-4 year fix if not feasible to repay 50% within a short notice period).
You can't pay off what you want - at least not with COOP and not if I've understood your post correctly.

I have have a tranche variable @ ~2.6xx%
2 tranches with LIBOR @ <1% (last time I saw it) for 3 years.

The minimum size tranches are dictated by the product offered and range from 100,000 to 250,000 minimum.

I can only pay off the variable tranche.
I can opt out of LIBOR at any point with 30 day's notice to one of the other product offerings, but I cannot pay it off before the 3 years are up.

Personnally, seeing the difference between the variable and LIBOR bills I have to pay each quarter means that I will be sticking with my current set up. If LIBOR goes higher than 1.5% I'll reconsider.

I'd still be interested in anyone offering a forecast for the next 6 months of what they think will realistically happen... or should that be ?
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Old 06.03.2012, 15:13
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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You can't pay off what you want - at least not with COOP and not if I've understood your post correctly.

I have have a tranche variable @ ~2.6xx%
2 tranches with LIBOR @ <1% (last time I saw it) for 3 years.

The minimum size tranches are dictated by the product offered and range from 100,000 to 250,000 minimum.

I can only pay off the variable tranche.
I can opt out of LIBOR at any point with 30 day's notice to one of the other product offerings, but I cannot pay it off before the 3 years are up.

Personnally, seeing the difference between the variable and LIBOR bills I have to pay each quarter means that I will be sticking with my current set up. If LIBOR goes higher than 1.5% I'll reconsider.

I'd still be interested in anyone offering a forecast for the next 6 months of what they think will realistically happen... or should that be ?
it depends on who you go with. one of the Kantonal banks were also not flexible with LIBOR tranche - that's the main reason I went with UBS in the end. with their LIBOR product, every 3 months you can pay back a portion of the loan, or pay it off completely.

re: LIBOR > 1.5% you might find it would then be too late to fix your 10 year at 2%, but maybe it crept up to 3% by then. really you are just betting on when the rates will increase. if they don't increase for long enough, you are quids in.
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Old 06.03.2012, 22:44
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Been offered 1.7% fixed for 10 years with UBS. Roughly 1k a month for a decent 4 bed house 20 minutes from Zurich town. I think it's time to buy!
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Old 06.03.2012, 22:55
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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Been offered 1.7% fixed for 10 years with UBS. Roughly 1k a month for a decent 4 bed house 20 minutes from Zurich town. I think it's time to buy!
sounds good
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Old 07.03.2012, 01:03
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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Been offered 1.7% fixed for 10 years with UBS. Roughly 1k a month for a decent 4 bed house 20 minutes from Zurich town. I think it's time to buy!
it would be rude not to at that price.
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Old 07.03.2012, 08:51
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Exactly, even of the rates go down further, I'd still be happy with my fixed rate. Just hope the house prices don't decrease :-(
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Old 07.03.2012, 10:41
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

just remember that when IRs are low, the rates themselves are largely irrelevant. what matters is the capital repayment. e.g. if rates were 0% you wouldn't go and buy a house for a 100 billion CHFs just be cause you could - since aside from having to pay 1 billion a year as 1% capital repayment, at some point you'll need to pay back some or all of that 100 billion.

assuming you can put away 50k chfs per year to housing for the next 20 years (assuming 20 years of working life), that leaves you with a max house value of only 1 million. maybe 2 million if you want to leave half the mortgage to the kids.
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Old 07.03.2012, 10:52
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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assuming you can put away 50k chfs per year to housing for the next 20 years (assuming 20 years of working life), that leaves you with a max house value of only 1 million. maybe 2 million if you want to leave half the mortgage to the kids.
Generally in CH, mortgages never get paid off , leaving a house to ones children only works if they can afford to pay the mortgage. Your quite young Phil, your kids will probably be in retirement by the time they inherit the house from you!
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Old 07.03.2012, 11:08
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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Generally in CH, mortgages never get paid off , leaving a house to ones children only works if they can afford to pay the mortgage. Your quite young Phil, your kids will probably be in retirement by the time they inherit the house from you!
good point! just have loads of kids and get them to pay off the mortgage for you while you retire!
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Old 07.03.2012, 11:16
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

keep in mind that IR's will go up at some point (and that might be already in 2013)... going from 1.5% to 3% sounds trivial but in reality means that you have a 100% increase (corresponding to doubling the "rent" you have to pay). In the medium/long term, they might even go up again to 4-5% (and that's a 3x-increase). People tend to forget that.
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Old 07.03.2012, 12:49
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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keep in mind that IR's will go up at some point (and that might be already in 2013)... going from 1.5% to 3% sounds trivial but in reality means that you have a 100% increase (corresponding to doubling the "rent" you have to pay). In the medium/long term, they might even go up again to 4-5% (and that's a 3x-increase). People tend to forget that.
the problem is that the economic crisis makes gamblers of us all.

japanese rates have been at or near zero for the best part of two decades. in effect, paying homeowners for the privilege of financing their home.

it could be that rates stay near zero for 20 years in europe too. if you fix at 1.7%, you already have a guarantee for the first 10 years and then you are just gambling on the second decade.
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Old 07.03.2012, 13:00
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

so, I really don't understand finance or interest rates or the like. But if the banks are offering sub 2% for a 10 year rate, wouldn't this mean that they think the rates will stay low, or come back down after a blip up? I really need to start figuring it out. We just bought in Nov and we put it all in a 2 year at 1.4% as weren't really sure if we should go with LIBOR and it is short enough that hopefully by 2013 we will know what is going on. And that the rates won't shoot up then!
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Old 07.03.2012, 13:04
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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Been offered 1.7% fixed for 10 years with UBS. Roughly 1k a month for a decent 4 bed house 20 minutes from Zurich town. I think it's time to buy!
Have you got this officially, or is it a personal offer?

When I look at the UBS site, their 10 year offer is 2.24%

COOP: 2.27%

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so, I really don't understand finance or interest rates or the like. But if the banks are offering sub 2% for a 10 year rate, wouldn't this mean that they think the rates will stay low, or come back down after a blip up? I really need to start figuring it out. We just bought in Nov and we put it all in a 2 year at 1.4% as weren't really sure if we should go with LIBOR and it is short enough that hopefully by 2013 we will know what is going on. And that the rates won't shoot up then!
That's pretty much why I'm sticking with LIBOR at the mo. I think the rates are so low that the banks aren't anticipating a major change.

Keep in mind that interest rates in CH have been traditionally much lower than in the Eurozone (and UK - where I make most of my comparisons). LIBOR of course is excepted as it is an international rate, rather than national.
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Old 07.03.2012, 13:08
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

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so, I really don't understand finance or interest rates or the like. But if the banks are offering sub 2% for a 10 year rate, wouldn't this mean that they think the rates will stay low, or come back down after a blip up? I really need to start figuring it out. We just bought in Nov and we put it all in a 2 year at 1.4% as weren't really sure if we should go with LIBOR and it is short enough that hopefully by 2013 we will know what is going on. And that the rates won't shoot up then!
http://en.wikipedia.org/wiki/Interest_rate_swap
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Old 07.03.2012, 13:08
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Re: CHF LIBOR slowly creeping up, but fixed interests going down

This is the disadvantage of UBS and CS - basically the rates are completely negotiable, depending on how good (for the bank) they think you are.

By contrast PostFinance for example has set rates and what you see on the website is what you get - it is just a matter of whether they accept you as a client or not. I'm not sure about Coop.



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Have you got this officially, or is it a personal offer?

When I look at the UBS site, their 10 year offer is 2.24%

COOP: 2.27%



That's pretty much why I'm sticking with LIBOR at the mo. I think the rates are so low that the banks aren't anticipating a major change.

Keep in mind that interest rates in CH have been traditionally much lower than in the Eurozone (and UK - where I make most of my comparisons). LIBOR of course is excepted as it is an international rate, rather than national.
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