Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #1  
Old 23.04.2009, 16:22
PaddyG's Avatar
Forum Legend
 
Join Date: Aug 2007
Location: Pensier, Fribourg
Posts: 9,243
Groaned at 118 Times in 102 Posts
Thanked 16,857 Times in 5,912 Posts
PaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond repute
Fixed rate, variable or mixed?

We will shortly sorting out our financing options for our appt. purchase and with such low variable interest rates, I'm tempted to go with 1 of these for at least part, if not most of our financing. Question is, what are the interest rate forecasts like? Am I right in thinking that a variable mortgage can be converted into a fixed rate after any 3 month cycle, should the rates appear to be rising fast? Or am I commited to a fixed term on this variable? Would appreciate some experiences/opinions on the matter.
Cheers.
Reply With Quote
  #2  
Old 23.04.2009, 16:38
Forum Legend
 
Join Date: Jun 2007
Location: Ticino
Posts: 3,087
Groaned at 96 Times in 67 Posts
Thanked 4,068 Times in 1,619 Posts
Snoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
We will shortly sorting out our financing options for our appt. purchase and with such low variable interest rates, I'm tempted to go with 1 of these for at least part, if not most of our financing. Question is, what are the interest rate forecasts like? Am I right in thinking that a variable mortgage can be converted into a fixed rate after any 3 month cycle, should the rates appear to be rising fast? Or am I commited to a fixed term on this variable? Would appreciate some experiences/opinions on the matter.
Cheers.
UBS offers a CHF LIBOR-linked mortgage which renews every three months. So, I guess that might be what you are looking for. I don't know about the other banks though.
Reply With Quote
  #3  
Old 23.04.2009, 16:56
PaddyG's Avatar
Forum Legend
 
Join Date: Aug 2007
Location: Pensier, Fribourg
Posts: 9,243
Groaned at 118 Times in 102 Posts
Thanked 16,857 Times in 5,912 Posts
PaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
UBS offers a CHF LIBOR-linked mortgage which renews every three months. So, I guess that might be what you are looking for. I don't know about the other banks though.
Even though we currently bank with UBS, we're steering well clear of them and will probably end all our dealings very shortly. Don't trust them and didn't get a good "feeling" with them. At all.
Reply With Quote
  #4  
Old 23.04.2009, 16:59
Forum Veteran
 
Join Date: Feb 2008
Location: Zurich
Posts: 1,020
Groaned at 6 Times in 6 Posts
Thanked 345 Times in 262 Posts
bill_door has an excellent reputationbill_door has an excellent reputationbill_door has an excellent reputationbill_door has an excellent reputation
Re: Fixed rate, variable or mixed?

does this help?

http://www.postfinance.ch/pf/content...g/compare.html

i think you are referring to the 'dynamic' rate in the link above when talking about variable rates. as you can see if you have a dynamic mortgage (3years) at the moment the rate is 1.35%, and is recalculated every three months, but the maximum it can be during those 3 years will be 3.7%, is if rates go mad, you have 'some' short term protection.

you are really going to have to sit down and do the numbers and speculate what the interest rates AND what your personal circumstances will be like over the coming years/decades.

i think the general feeling is that rates will go up but when they start going up and how sharply is difficult to say. but its swings and roundabouts: if you lock in now (fixed) at a low rate for 7 years what is the situation going to be like when you come to renew at that time. chances are you will be on a higher rate, but will your salary be higher or expenses (planning on having kids?) higher! the risk is built in in the future. with a fully dynamic you are risking more short term. bit of both might be a better option.

over the lifetime of the mortgage its a tough one! )C;

i've always found it difficult to see where we as consumers win in the mortgage and insewerance business! these guys have professional employed to squeeze every last penny out of the rates they provide to make them profits, not us!
Reply With Quote
This user would like to thank bill_door for this useful post:
  #5  
Old 23.04.2009, 17:03
PaddyG's Avatar
Forum Legend
 
Join Date: Aug 2007
Location: Pensier, Fribourg
Posts: 9,243
Groaned at 118 Times in 102 Posts
Thanked 16,857 Times in 5,912 Posts
PaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond reputePaddyG has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Thanks Bill, we're actually goiung to go with Postfinance. Very impressed with them, I must admit.
Reply With Quote
  #6  
Old 23.04.2009, 17:18
Forum Veteran
 
Join Date: Feb 2008
Location: Zurich
Posts: 1,020
Groaned at 6 Times in 6 Posts
Thanked 345 Times in 262 Posts
bill_door has an excellent reputationbill_door has an excellent reputationbill_door has an excellent reputationbill_door has an excellent reputation
Re: Fixed rate, variable or mixed?

Quote:
View Post
Thanks Bill, we're actually goiung to go with Postfinance. Very impressed with them, I must admit.
this might be useful too:

http://www.wikihow.com/Create-a-Mort...icrosoft-Excel

this is for the traditional UK/IE mortgage where you pay off the capital. I have been meaning to modify it and make it work for a CH model. perhaps start there and play with it and see how things go.

obviously virus scan this before you use it! (c;
Attached Files
File Type: zip mortg-calulator.zip (25.2 KB, 62 views)
Reply With Quote
  #7  
Old 23.04.2009, 17:20
Forum Veteran
 
Join Date: Nov 2008
Location: Richterswil
Posts: 541
Groaned at 11 Times in 4 Posts
Thanked 378 Times in 169 Posts
Breezy has an excellent reputationBreezy has an excellent reputationBreezy has an excellent reputationBreezy has an excellent reputation
Re: Fixed rate, variable or mixed?

Rates are low and likely to stay low across the world for some time. All governments are effectively moving to zero interest rates in an attempt to reflate their economies. It will last a long time. One thing, there isnt that much room for them to go down.
Reply With Quote
  #8  
Old 23.04.2009, 17:47
Forum Legend
 
Join Date: Jun 2007
Location: Ticino
Posts: 3,087
Groaned at 96 Times in 67 Posts
Thanked 4,068 Times in 1,619 Posts
Snoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
Even though we currently bank with UBS, we're steering well clear of them and will probably end all our dealings very shortly. Don't trust them and didn't get a good "feeling" with them. At all.
Oh well, thanks anyway Snoopy. Much appreciate the answer...
Reply With Quote
  #9  
Old 23.04.2009, 18:11
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 3,480
Groaned at 18 Times in 16 Posts
Thanked 2,008 Times in 1,196 Posts
CH_Me has a reputation beyond reputeCH_Me has a reputation beyond reputeCH_Me has a reputation beyond reputeCH_Me has a reputation beyond repute
Re: Fixed rate, variable or mixed?

When we borrowed here we googled and found historical Libor rates. The rate was never above something like 7%.

When looking at fixed rates, you are paying considerably more. To win with fixed rates, the variable interest rate would have to go above the fixed deal by more than the difference for longer than you would have benefited from a variable rate being under the fixed rate. Say a variable deal is 1% and fixed 3%, and it took 3 years for the interest rate to be raised to 3%. The interest rate would have to remain above 3% for more than 3 years for you to win on a fixed deal.

Variable rates have been the best option for me the past 12 years and 5 mortgages. I would never consider fixing at the current rates they are offering. 3% for 5 years is a joke. The highest variable interest rate I paid recently was 3.55% - and that was for less than 2 years when it reduced again.

I am currently on a 1 month Libor and every month I pay less I also look every month what fixed rates they are offering, but at 3% I will be paying 3 times as much
Reply With Quote
The following 3 users would like to thank CH_Me for this useful post:
  #10  
Old 24.04.2009, 14:20
dino's Avatar
Forum Veteran
 
Join Date: Feb 2006
Location: Zurich
Posts: 1,631
Groaned at 31 Times in 24 Posts
Thanked 1,279 Times in 628 Posts
dino has a reputation beyond reputedino has a reputation beyond reputedino has a reputation beyond reputedino has a reputation beyond reputedino has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
UBS offers a CHF LIBOR-linked mortgage which renews every three months. So, I guess that might be what you are looking for. I don't know about the other banks though.
with the UBS Libor mortgage, you can jump off the roller coaster any time (i.e. at the end of any quarter) and transfer outstanding balance to a fixed rate mortgage.
Reply With Quote
  #11  
Old 24.04.2009, 14:21
dino's Avatar
Forum Veteran
 
Join Date: Feb 2006
Location: Zurich
Posts: 1,631
Groaned at 31 Times in 24 Posts
Thanked 1,279 Times in 628 Posts
dino has a reputation beyond reputedino has a reputation beyond reputedino has a reputation beyond reputedino has a reputation beyond reputedino has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post


over the lifetime of the mortgage its a tough one! )C;

i've always found it difficult to see where we as consumers win in the mortgage and insewerance business! these guys have professional employed to squeeze every last penny out of the rates they provide to make them profits, not us!

you obviously haven't been reading about the li'l mess the "professionals" have gotten themselves into the last few months, have you?
Reply With Quote
  #12  
Old 24.04.2009, 14:22
Forum Legend
 
Join Date: Jun 2007
Location: Ticino
Posts: 3,087
Groaned at 96 Times in 67 Posts
Thanked 4,068 Times in 1,619 Posts
Snoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
with the UBS Libor mortgage, you can jump off the roller coaster any time (i.e. at the end of any quarter) and transfer outstanding balance to a fixed rate mortgage.
The OP has an allergy to the UBS.
Reply With Quote
  #13  
Old 17.10.2011, 14:12
drmom's Avatar
Forum Veteran
 
Join Date: Apr 2011
Location: Somewhere in SG
Posts: 2,341
Groaned at 12 Times in 12 Posts
Thanked 2,187 Times in 1,050 Posts
drmom has a reputation beyond reputedrmom has a reputation beyond reputedrmom has a reputation beyond reputedrmom has a reputation beyond reputedrmom has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post

Variable rates have been the best option for me the past 12 years and 5 mortgages. I would never consider fixing at the current rates they are offering. 3% for 5 years is a joke. The highest variable interest rate I paid recently was 3.55% - and that was for less than 2 years when it reduced again.

I am currently on a 1 month Libor and every month I pay less I also look every month what fixed rates they are offering, but at 3% I will be paying 3 times as much
OK, this is a bit of an older thread...but (as I inferred to in the housing in ZH thread) what about 1.8% for 5 years, also a joke? Would you still not consider fixing in a rate now?
Reply With Quote
  #14  
Old 17.10.2011, 14:24
Phil_MCR's Avatar
Forum Legend
 
Join Date: Oct 2009
Location: Basel
Posts: 14,989
Groaned at 295 Times in 199 Posts
Thanked 19,055 Times in 8,017 Posts
Phil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond repute
Re: Fixed rate, variable or mixed?

you can get libor rates at around 1% now and 10 year fixed for around 2.5%.

so you pay 2.5x more interest, but since the interest is so small, is it really worth squeezing out the extra few points for security over the 10 years. it really depends how well you are able to ride out the change if LIBOR rates increase to over 2.5%.

for me the difference wasn't worth the security towards the rate security towards the tail end of the 10 year term.

over a 5 year term, i'd probably take LIBOR over a fixed. for me 10 year is on the cusp of the decision and a 15 year fix (around 3%) wins out over the LIBOR for me.
__________________
By replying to this post, you hereby grant Phil_MCR a royalty-free license to use, in any way, anything posted by you on the internet. If you do not accept, stop using EF and delete your account.
Reply With Quote
  #15  
Old 17.10.2011, 14:25
drmom's Avatar
Forum Veteran
 
Join Date: Apr 2011
Location: Somewhere in SG
Posts: 2,341
Groaned at 12 Times in 12 Posts
Thanked 2,187 Times in 1,050 Posts
drmom has a reputation beyond reputedrmom has a reputation beyond reputedrmom has a reputation beyond reputedrmom has a reputation beyond reputedrmom has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
you can get libor rates at around 1% now and 10 year fixed for around 2.5%.

so you pay 2.5x more interest, but since the interest is so small, is it really worth squeezing out the extra few points for security over the 10 years. it really depends how well you are able to ride out the change if LIBOR rates increase to over 2.5%.

for me the difference wasn't worth the security towards the rate security towards the tail end of the 10 year term.

over a 5 year term, i'd probably take LIBOR over a fixed. for me 10 year is on the cusp of the decision and a 15 year fix (around 3%) wins out over the LIBOR for me.
interesting! Thanks...over crunching the numbers at the moment and my head is starting to spin!
Reply With Quote
  #16  
Old 17.10.2011, 14:58
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 3,480
Groaned at 18 Times in 16 Posts
Thanked 2,008 Times in 1,196 Posts
CH_Me has a reputation beyond reputeCH_Me has a reputation beyond reputeCH_Me has a reputation beyond reputeCH_Me has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
OK, this is a bit of an older thread...but (as I inferred to in the housing in ZH thread) what about 1.8% for 5 years, also a joke? Would you still not consider fixing in a rate now?
Just looked at the CS website and 2.6% for 10 years in tempting but that's almost 4x the rate we are paying now on a 1 month libor. If rates went up fast I would reduce my mortgage with the money I have saved by not fixing It all depends on your attitute to risk. I'm willing to take the risk and not pay the bank my hard earned money when I don't have to.

With the franc so high they are unlikely to increase interest rates until inflation strikes.
Reply With Quote
The following 2 users would like to thank CH_Me for this useful post:
  #17  
Old 17.10.2011, 15:07
drmom's Avatar
Forum Veteran
 
Join Date: Apr 2011
Location: Somewhere in SG
Posts: 2,341
Groaned at 12 Times in 12 Posts
Thanked 2,187 Times in 1,050 Posts
drmom has a reputation beyond reputedrmom has a reputation beyond reputedrmom has a reputation beyond reputedrmom has a reputation beyond reputedrmom has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
Just looked at the CS website and 2.6% for 10 years in tempting but that's almost 4x the rate we are paying now on a 1 month libor. If rates went up fast I would reduce my mortgage with the money I have saved by not fixing It all depends on your attitute to risk. I'm willing to take the risk and not pay the bank my hard earned money when I don't have to.

With the franc so high they are unlikely to increase interest rates until inflation strikes.
I know...at least comparing the 2 year to the 10 year fixed, the 10 year costs me 9k more a year, and the 5 year is about 3500 more... of course, who knows what the new rates will be in 2 years when time to renew (if we choose the 2 year route)!
Reply With Quote
  #18  
Old 17.10.2011, 15:11
Phil_MCR's Avatar
Forum Legend
 
Join Date: Oct 2009
Location: Basel
Posts: 14,989
Groaned at 295 Times in 199 Posts
Thanked 19,055 Times in 8,017 Posts
Phil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
Just looked at the CS website and 2.6% for 10 years in tempting but that's almost 4x the rate we are paying now on a 1 month libor. If rates went up fast I would reduce my mortgage with the money I have saved by not fixing It all depends on your attitute to risk. I'm willing to take the risk and not pay the bank my hard earned money when I don't have to.

With the franc so high they are unlikely to increase interest rates until inflation strikes.
agree with you. rates look to stay low in the near term. a near term fix is unlikely to pay off.

the 15 year fix at 2.9% is very tempting!
Reply With Quote
  #19  
Old 17.10.2011, 15:13
Phil_MCR's Avatar
Forum Legend
 
Join Date: Oct 2009
Location: Basel
Posts: 14,989
Groaned at 295 Times in 199 Posts
Thanked 19,055 Times in 8,017 Posts
Phil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond repute
Re: Fixed rate, variable or mixed?

Quote:
View Post
I know...at least comparing the 2 year to the 10 year fixed, the 10 year costs me 9k more a year, and the 5 year is about 3500 more... of course, who knows what the new rates will be in 2 years when time to renew (if we choose the 2 year route)!
don't forget to knock tax off your interest costs. so if you have 25% tax rate, then you 9k of costs will be only 6.75k of costs post-tax.
Reply With Quote
  #20  
Old 17.10.2011, 15:31
jaudi's Avatar
Forum Veteran
 
Join Date: Sep 2007
Location: zurich
Posts: 574
Groaned at 4 Times in 4 Posts
Thanked 495 Times in 231 Posts
jaudi has a reputation beyond reputejaudi has a reputation beyond reputejaudi has a reputation beyond reputejaudi has a reputation beyond repute
Re: Fixed rate, variable or mixed?

One comment re: long term fixes. On the surface they are very attractive. Just consider, what is the chance that in the next 10-15 years you may want to either pay off your mortgage (or a substantial part of it) or maybe more likely to sell the property (and hence cease mortgage). Such long term fixed deals could incur significant penalties in these scenarios.
Reply With Quote
The following 2 users would like to thank jaudi for this useful post:
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Day of mixed fortunes... Colonelboris General off-topic 4 28.02.2009 15:16
Mixed Touch Rugby Joanna Williamson Sports / Fitness / Beauty / Wellness 3 17.08.2008 00:08
Exchange rate CHF - EUR: where is the best rate in Basel? jttraveller Finance/banking/taxation 3 02.07.2008 11:47
mixed blessings Florida Bound Introductions 8 31.01.2008 18:39


All times are GMT +2. The time now is 19:49.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2022, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0