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发表于 2009-7-18 08:28
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ZT - TMG - Will 5-Year Mortgage Rates Fall Further?
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Banks last raised mortgage rates on June 9, when the 5-year bond yield was at 2.68%.
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; B- \' ?0 m2 V+ FSince then, the 5-year yield (which guides fixed mortgage pricing) has fallen to 2.44%, but bank rates have not budged.0 n9 z1 g# Z7 F- i: n. o
4 ^/ W6 a7 k3 j$ KBMO economist, Doug Porter, told the Toronto Star it's because banks "want to be convinced that it is not a flash in the pan and that any retreat in yields is sustained." # Y4 k& K9 S1 Z
+ Q" s! J/ a5 m* c5 m* O8 @He says: "I believe that we are probably not too far away from that point. It might take a little more of a deeper rally (in bond prices) to make it completely convincing."& w2 d- K3 ?4 R5 j! G! Z' w. ?$ E
& W9 a9 z: C% Q' i& d* g0 lThe often quoted CIBC economist, Benjamin Tal, thinks yields could fall another 0.05% to 0.10%, but any drop in fixed-rates will be short-lived. "By the end of the year, we'll start seeing rates rising," he says.' Z' O- T% S( g- Z( x3 c
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If rates do drop another 0.10%, it would translate into a $5.50 monthly payment savings for every $100,000 of mortgage. That's a total savings of $478 over five years, assuming a 25-year amortization and typical fixed rates.% o& U! U& Y. ] Q9 o: p# z
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But remember, trying to time bond and mortgage rates is financially hazardous. While you're waiting, rates can move the wrong way-quickly.
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You're usually better served by focusing on factors that can dwarf a 0.10% rate savings, like finding a mortgage with the optimal term and just the right amount of flexibility (pre-payment options, openness, readvanceability, etc.). Too much flexibility is a waste, and too little can cost you in the long-run.
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$ f+ G% _9 B: d, r3 @; |9 Nwww.happymortgages.com |
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发表于 2009-6-24 17:04
