Long-term wholesale interest rates have been dropping, which reinforces what we’ve been saying for a while – that the market overcooked its forecast on interest rates. Rates will increase, but not as quickly as the market initially priced in. The 5 year funding rate has dropped half a percent to 5.30% since it peaked
For the past 12 months mortgage rates have been at historic lows. There has been talk for some time that rates will eventually increase and 2010 has been slated as the year that will happen. Some Economists have talked about as early as April whilst others are still talking September. Timing aside,
2009
How the Market is mispricing Mortgage Rates
Filed under: Housing Market, Interest Rates, Mortgages, NZ Economy
In previous posts we have shown you how to save tens of thousands in mortgage interest by leveraging short-term rates and repaying your mortgage faster.
In this post we show you that long-term rates are overpriced, and that whilst mortgage rates will increase, it won’t be nearly as fast as the media banter would suggest.
Summary
Mortgage rates
Too many homeowners are preoccupied with mortgage rates when they should be focused on repaying their debt as fast as possible. In this post I’ll show you how to keep your repayments constant for the life of your mortgage (“fixed for life”) but at the same time benefit from low short term interest rates.
Step One
Put
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